Preamble

The House met at Eleven o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE MEMBERS' BILLS (DEFERMENT)

Mr. Speaker: The hon. Member for Erith and Crayford (Mr. Wellbeloved) invited me on 16th March to give a ruling on the deferment of Private Members' Bills. This I now do. The House may remember that the situation arose when the hon. Member, though not in charge of a Bill or authorised by the Member in charge, wished to have a Bill deferred for three weeks.
The provisions of the Standing Orders are quite clear. Paragraph (5) of Standing Order No. 1 states that an Order of the Day not disposed of shall be deferred to such sitting day as the Member in charge of that order shall appoint. For many years it has been the practice of the House to assume that the Member in charge would wish the next available Private Members' Friday to be appointed in the absence of any instructions to the contrary made either in the House on his behalf or by informing the Clerks at the Table.
I may add here, since the hon. Member himself raised it, that when the Clerks at the Table mention "Friday next" to the Chair when a Bill is read over and objected to, they are not themselves naming a day but merely indicating to the Chair that they have no instructions to the contrary from the Member in charge. It is the Chair and the Chair alone who appoints the day.
There is a series of rulings both by my predecessors and myself deprecating attempts by opponents of a Bill to prejudice its progress by naming too distant a date for its deferment. The Chair is, however, placed in a dilemma in determining what is too distant a date since this may differ from Session to Session and, indeed, as a session progresses. In one of the earliest rulings in 1887, Mr.

Speaker Peel substituted a date three months ahead, for one, four months ahead. But I think that it would be generally agreed that in present circumstances a three months' deferment would almost certainly kill a Bill, and a date of even three weeks ahead might on occasions severely prejudice its chances.
I should like to have a further opportunity for reflection on this, and I hope that the House will allow me to do so. In the meantime, I would welcome any advice that the Procedure Committee could give the House, and I hope that it might be able to find time to consider the matter reasonably soon.

Mr. James Wellbeloved: I am indebted for your interim ruling on this matter, Mr. Speaker. I wonder whether in the further consideration that is given, it will be possible for you to take into account the fact that many Bills which are presented to the House by hon. Members, or taken up by hon. Members, have come from another place. When it appears that, week after week, the Member in charge of a Bill, or any Member authorised by him, fails to turn up to name a day, surely it is in the interests of the House to allow such Bills, which are put down without serious intent and which are cluttering up the Order Paper, to lapse or to be postponed so that in effect they are taken off the Order Paper. I hope that that serious point will be taken into consideration when you review the position, Mr. Speaker.

Mr. Speaker: I am obliged to the hon. Gentleman. I think there are quite a number of important considerations of that nature. That is why I should like to have the advice of the Procedure Committee. I hope hon. Members will have an opportunity of putting this kind of point. I do not think it is a matter on which I should rule without further consideration.

COMPLAINT OF PRIVILEGE

Mr. Speaker: Yesterday the hon. Member for Mansfield (Mr. Concannon) invited my attention and that of the House to a matter which he believed affected the privileges of the House.
I have given the matter my careful consideration, but have to rule that it is


not, in my view, of such a nature as to entitle a motion concerning it to lake precedence over the Orders of the Day.

SOCIALIST PROGRAMME

11.13 a.m.

Mr. Dennis Skinner: I beg to move,
That this House calls attention to the need to change, not re-arrange, social, economic and Parliamentary priorities: and declares that, in a system where the free market forces are shown to be continually breaking down, only the implementation of a truly Socialist programme can create a One Nation society.

Hon. Members: Hear, hear.

Mr. Skinner: I am pleased to hear some of my hon. Friends applauding that brief and cautiously worded motion.
At the outset I should say that I was prompted to move this motion for three main reasons. First, we have just had the annual Budget. We were subjected to the usual contradictory suggestions from the media for many weeks before the Budget. Because of that it is necessary to lay down what I consider to be a Socialist programme and a more Socialist Budget.
I am somewhat fascinated by all the phrases and jargon used in economic debates—the "snake in the tunnel", the "crawling peg", and "clean and dirty floats". All in all, at the end of the day what happens is at the margins. There are some small changes made—all with a view to keeping the capitalist system alive. It is sad to say that previous Labour Governments, not through lack of will, perhaps—not totally through lack of will, anyway—also continued to play around at the margins, to shift a few resources here and there to make it appear as though we were actually on the road to Socialism.
I may be accused of not having attempted enough, because, I acknowledge, there is a tremendous economic crisis, and to that extent I may be subject to some charge from Left-wing sympathisers, who may accuse me of not going far enough—although I doubt whether there will be any in this Chamber today.
The fact is that the main strategy which has been decided by this Government for

1973 was not in the Budget at all. Most of the decisions were taken long before that, when it was decided to have a Common Market strategy which necessitated the Government—the Prime Minister in particular—trotting across to all the continental capitals to arrange deals with Pompidou on the one hand and Willy Brandt on the other. Most of the decisions were made at that time. Perhaps it could be argued that some other decisions were made, or were attempted to be made, at Chequers and in Downing Street, at the talks with the TUC leaders, because it was at that point that the Government decided to change their course.
So the Budget itself was for propaganda purposes—a day to allow the hon. Member for Worcestershire, South (Sir G. Nabarro) to wear his top hat. It was nothing more than a charade, since most of the decisions had already been taken.
The second reason why I think it important to have this debate, especially for the Left-wing side of the party, is that we are continually challenged by the media pundits and others that our programme consists merely of slogans—I might be accused of that later today— and that in actual fact it has not been thought through deeply enough for it to be sustained as a proper and logical argument.
It is noticeable that all the Press and all the media will constantly provide about 57 different varieties of consensus politics. They will argue the toss about this as being all right and something else as being all right, but except for such newspapers as the Morning Star and some other Left-wing organs, the Left-wing case goes by default. I should have mentioned Tribune in that same context, and perhaps that can be argued some weeks when it puts our point of view as distinct from that of the Right wing. So, for that reason, too, it is necessary that we have a debate to try to put the case— not merely myself, but some of my colleagues, notably the hon. Member for Kingston upon Hull, East (Mr. Prescott), who, I hope, will catch your eye, Mr. Speaker, because he has attempted to speak about the ports and how they could be taken over in a logical, sensible fashion.
The third reason, perhaps the most important, is that we are to have another Budget anyway shortly. There is no doubt in anybody's mind that what happened a few weeks ago when the Chancellor stood there and said he was introducing a broadly neutral Budget was that he was keeping all the options open. It is well known that the Government are seeking an early opportunity to go to the country if they think the opinion polls are favourable to them, and that, in the event of that not being the case, it is pretty certain that there will be a further Budget shortly, perhaps within three months, or it could be six months, may be. There is no doubt in the mind of anybody who studies the economic situation today that the Budget will include massive cuts in public expenditure. The Chancellor yesterday, in answering questions by some of my hon. Friends, was almost saying as much. Whereas previously he had talked about growth continuing at 5 per cent. for several years, yesterday, under close questioning, he was inferring that that time scale had been cut down quite considerably. Therefore, we shall have another Budget if this Tory Government continue in power— unless, as I said, we have a General Election.
A Socialist programme naturally needs more than a Budget. It means that our whole philosophy is at stake if we are to embark on that course. Even apart from the programme itself, which is most important, it is also necessary to have a few essential requirements, and one of them, in my view, is that after we have elected a Socialist Government they have to show they are prepared to stand or fall by the manifesto at the election and the mandate given by the people. One of the tragedies about parliamentary democracy is that Governments—particularly this one—having produced a manifesto and sought a mandate from the public, and having gained it, have broken most of their major promises, but have continued in office willy-nilly using their parliamentary majority and trying to appear as though they were carrying out the policies they included in their manifesto.
A future Socialist Government should bear in mind that there is a lot of political cynicism around, and that the limits of tolerance have been stretched beyond

endurance for a good many electors and that what they want is a Government who, having been elected on a manifesto, will carry it through.
That is why some of my proposals are not overdramatised, as some people may imagine them to be. I take the view that if we can take a few cautious steps along the road to Socialism, and provided we have the will and the courage to carry it out, we can make even further advances in further periods of office.
Also, if we are to carry a Socialist programme through, we have to make some changes in this place, too. I shall be suggesting a few minor alterations. In the two and a half years or so in which I have been a Member of this place I have observed that there are a few obstructions, in my view, to carrying out what I consider to be a truly Socialist programme.

Mr. Christopher Tugendhat: The electorate, for a start.

Mr. Skinner: It is true that Parliament is changing continually. People who have been here a considerable length of time will tell us that Parliament is changing and fashioning itself to the new situation. My view is that if we are to carry out a Socialist programme we have to have a real and drastic surgery.

Mr. Timothy Raison: Would the hon. Member help us by saying whether his programme would include a one-party Parliament?

Mr. Skinner: I thought I had explained. I said that I shall undoubtedly be accused of not being Left wing enough in the proposals I am putting forward. They are of a temporary nature to carry us through the five years of a Parliament. I have not even advanced them as far as that. I do not think the hon. Member should worry at all. It might result in a decimated Opposition, it is true, after this first initial programme. I do not think there is any doubt that the electorate having listened to it, having voted for it, and having seen it carried out in practice, there would be a one-party State. The Opposition would be in total ruin—

Mr. Robert Mellish: The Conservative Opposition?

Mr. Skinner: The Conservative Opposition. My right hon. Friend, the ex-Minister of Works and the ex-Parliamentary Secretary to the Ministry of Housing—and various other nomenclatures—has hit the nail on the head.
I do not suggest that I am covering the complete ground, but the social programme would have to contain fairly drastic fiscal measures for redistributing wealth from the rich to the poorer sections of our society, coupled with a greater degree of public ownership and free collective bargaining. By that I mean collective bargaining completely free from the State.
In the long term, fiscal measures would be designed to provide a more egalitarian society and the eventual abolition of all means testing for social benefits. Hon. and right hon. Gentlemen on the Government benches may say, "What about income tax?" I am specifically talking about the 40 means tests which apply to social services benefits for the poorer sections of our society. I have said on more than one occasion that a Socialist Government's proposals on unemployment would be to some extent limited because of the major economic crisis with which we are faced. We were told yesterday that the unemployment figures were down to 717,000. That was regarded by the Government and most newspapers almost as a major victory for the Government's strategy. But the fact is that the figures are unlikely to go down any further than between 650,000 and 700,000.

Mr. Jeffrey Archer: I hope that the hon. Gentleman will couple with the 717,000 the 316,000 vacancies, because those are the two figures that are truly relevant.

Mr. Skinner: We have seen the movement of unemployment from the massive 1 million total in February 1972. I suggest that we are getting down to the lowest point, and that after this summer we shall see a move upwards once again. That is illustrated by all the economic indicators—and during the last fortnight I have been reading the Financial Times. After the summer the unemployment totals will be up once again. I base that forecast on what has happened in all the "stop-go" periods since the end of the war. During the period of the post-war Labour Government the unemployment figure

was about 250,000. After the next stop in the economy it was 450,000, and after the next stop it was 550,000. In this stop it is likely to range between 600,000 and 700,000, and it will shoot up once again under a Conservative Government, with their cuts in public expenditure in the next Budget, which will have to be introduced shortly.
Inflation statistics are bandied about in this Chamber and outside, and comments are made on the nature of inflation. Since the freeze there has been an increase in food prices at the rate of 28 per cent. per annum. Low-paid workers and pensioners have to contribute 40 per cent. of their total income to pay for food, fuel and rent. That being so, it can reasonably be argued that the weight of inflation for the people I represent is about 15 per cent. even when we are supposedly in the middle of a freeze.
The pound is sinking in the East and the West. The floating pound may allow us to continue to import and export, but nobody worries what will happen inside our economy. We cannot allow the pound to continue to sink. Because we are in the Common Market the pound will be fixed shortly, when Pompidou and the rest of the Common Marketeers issue their instructions.
Last week the announcement was made of a balance of payments deficit of £77 million in one month The Evening Standard showed this almost as a major victory. Why was it shown as a major victory when in the previous month the deficit had been £78 million? The picture that is being portrayed to ordinary people is that we have growth and economic boom and at the same time are running an annual deficit at the rate of £1,000 million. In his Budget speech the Tory Chancellor of the Exchequer announced that he was carrying a deficit of £4,423 million Yet the media hardly uttered a word about this, and described the Budget as a broadly neutral one. It is a Budget that will lead to disaster. It was designed as the first Common Market Budget and is bound to result in further measures shortly.
The £4,423 million deficit does not arise because the working classes have had wage increases over and above what they should have had. The proportion of the economy that goes in wages is still between 60 per cent. and 61 per


cent., and in the last five years has hardly varied outside that parameter. The deficit has resulted from the massive tax reliefs that have been given to the Tories' rich friends in the two-and-three-quarter years they have been in office. It has arisen out of land and property speculation and the disastrous Common Market policy. There has been only one benefit from our entry to the Common Market, and that is to the 16 or 17 Members of Parliament who get £40 a day to talk in an assembly that has fewer powers than a parish council.
Perhaps the most alarming picture is that of the investment position. When I have issued my proposals hon. Gentlemen on the Government benches will no doubt ask what will happen about investment. It is a laugh. When the Conservative Government went to the people in June 1970 they said that the reason for the low investment at that time was the Socialist Government's measures. Their method of remedying that situation was to give the people within the Tory establishment and the wealthy section of our society greater largesse in the form of tax reliefs to encourage investment. Investment soared. The people in the know and the people in the City also noted that the Tories were to introduce a housing finance measure to push the rents of local authority and private tenants straight through the roof. A good deal of the money handed out in tax relief, share options and various other ways was pushed into the property market. Where else is it to go? A speculator is not particularly interested in the national interest. In investing his money he is more concerned about the return he will get, and the best return is from property.
One has only to look at any newspaper —the Sunday Times, the Observer or the Daily Telegraph on a Saturday—to see whole pages of financial advertisements asking for investments in various property funds. The funds have grown by as much as 90 per cent. over the last two years. Tory speculators invest their money in property. I have no doubt that a football pool winner will be instructed by his bank manager to invest in the property market as it is the most lucrative of all.
Because of the Government's Common Market policy the rest of the money has

gone over the Channel. I have been reading some other city columns and I see that France has set up an institution in the City of London deliberately to avoid paying tax. The idea of that French banking institution is to see that some of the money which should be invested in this country to provide the capital resources in ensuring work for our people goes to the continent.
If anybody seeks to query the way in which I want to distribute £1,900 million in the economy, I must tell them that my philosophy certainly does not envisage the kind of competitive society which Tories want to see, for this certainly will not solve our problems. The Government in their policy U-turn have begun to invest in public and private industry —and I do not entirely approve of what they are doing in that respect—and they are seeking to prove the Socialist case. The Conservative Government cannot go too far along this road because the Government are surrounded by people who want to see the true Tory competitive society continue. The Government in that respect are battling against tremendous odds since the Tory Party by and large will face opposition if it seeks to go too far down that path. We should all learn a lesson from what has happened. When Conservatives say that the Socialist programme will not provide investment for private and public industry—though eventually there will not be a lot of private industry left—they want to look back at all the suggestions they made during past elections.
I turn to deal with the way in which I should like to see the figure of about £2,000 million being redistributed. Fiscal measures cannot provide the total answer to a Socialist programme; they can go only part of the way. When I analyse the ways in which this money can be redistributed, I have to bear in mind that a man on £170 per week in June 1970 has recouped over the period of 2½ years as much as £30,000 following actions by the Tory Government to assist him.
Within the last fortnight we have heard my hon. and learned Friend the Member for Northampton (Mr. Paget), in his honest simple way, tell the House conclusively that the City has never had it so good. He said that he has been


almost embarrassed by the riches he has managed to obtain in the last two-and-a-half years. That is the background to what I am saying.
The same sort of picture is true of estate duty. We have seen two cuts in estate duty since the Conservative Government came into office. I have consulted some of my slide-rule friends and they tell me that the figure saved overall in estate duty is about £143 million. A racket is under way at present since people are buying agricultural land so as further to avoid death duties. In my first proposals we would stop all that and in that instance we would recoup an extra £200 million.
I turn to the question of surtax and corporation tax. In the last five years the yield of surtax and corporation tax has been around 40 per cent., yet in that same period income tax yield has risen by 100 per cent. There would be a reduction in the surtax level from £5,000 to £4,000, which would mean taking back the £300 million which is being handed out in tax relief in 1973 following the Finance Act 1972.
The Observer or Sunday Times contained an article last week or the week before which went to great lengths to show that the figure will not be £300 million. What the article was really saying was that the £300 million is due to be paid this year, but refers to last year. But whatever was claimed by that newspaper, the fact is that those people have been given £300 million, and I believe that it should be taken back, and most of my hon. Friends would agree with me.
On the subject of corporation tax, an increase to a figure of 42½ per cent. would realise £260 million. Capital gains— which has been something of a failure since its introduction—could be considerably strengthened. If the level were raised from 30 to 40 per cent., that would realise about £100 million.
I turn to the subject of wealth tax, which was considered by the Labour Government. I believe that a wealth tax could be introduced, and at one time it was suggested that such a tax would be introduced in the 1970 Budget. The chances are that if that had happened Labour might not now be sitting on the Opposition benches. At any rate it was not introduced at that stage, but

in my view it is a necessary adjunct to Socialist fiscal measures. I envisage a wealth tax of ½ per cent. rising to 5 per cent., excluding all assets totalling £25,000 —which would rule out most householders but not all. If the figure rose, as I suggest, to 5 per cent., it would produce a total of £500 million.
I turn to the question of defence cuts and here my suggestion may not be accepted by some of my Left-wing friends. I suggest that in view of immediate needs—we are not talking about the long term but the immediate situation—we can effect defence cuts which will save £150 million straight away in various branches of defence spending, with the knowledge that over a period of several years the defence bill could be reduced by half. But initially I believe that the figure could be restored only to 1972 levels. It would produce between £150 million to £300 million, depending on the types of cuts made.
I turn to overseas private investment. Some five years ago the amount of such investment was running at £360 million. In 1972 the figures for the first nine months show that overseas private investment was about £1,000 million. Therefore, for the full year it would be about £1,400 million. I have a novel scheme for looking after that aspect as well. If we are to attempt to prevent it and to recoup some of the money, I suggest a way in which it can be done. The Bank of England must give authority for money to be sent abroad—[Interruption] The nationalisation of the banks will not totally solve the problem. I am attempting to argue that the nationalisation of the banks and insurance companies must also be associated with fiscal measures to stop the export of capital abroad. The way to do that, in my view, is to have a "Pay as you export capital" scheme rather like PAYE. All money sent abroad would be taxed at, say, 10 or 15 per cent. If it had been 10 per cent. in 1972, £140 million would have gone into the Treasury's coffers. Alternatively it might be argued that some of the money would not have gone abroad because of this penal tax. If that happened, it would have beneficial effects in both directions.
There would have to be import controls. Last year, car imports increased


by 30 per cent. over the previous year. As a percentage of total car sales, imported cars rose from 19 to 25 per cent. One can see the real problem that there is in just this one isolated area. Import controls running contrary to the so-called free competitive policy enshrined in the Common Market would have to be part of any renegotiation terms which, by the time that I had finished, would cause the people running the Common Market to make it abundantly clear that they did not want us in any longer.
Next, I come to rents. Some of my right hon. and hon. Friends, both those on the National Executive Committee and members of the Opposition Front Bench, have suggested ways and means by which we might resolve the rents situation. We are on record as undertaking to repeal the Housing Finance Act. But that would have to be associated with even more drastic measures. In my view the repeal of that legislation on paper carries us nowhere. When we repeal the Housing Finance Act we must also make sure that sufficient money is channelled into local authority housing revenue accounts to enable us to get back to somewhere near the status quo as it existed before the passing of the Housing Finance Act.
We need to go even further. I believe that there should be subsidies of the order of £250 million in respect of rents, together with the municipalisation of all private-rented property and the public ownership of all development land. In order to see that the massive council house building drive was continued, in my view there would have to be rates of interest for local authorities even lower than those which applied under the Labour Government's 1965 Act. The borrowing rate at that time was a theoretical 4 per cent. In my view, that would have to be reduced to 3 per cent. if we were to get on top of the problem of providing decent houses for those who could not afford to buy their own homes.
That would need to be associated with a building programme arising out of the public ownership of the building industry. In itself, that would achieve two objectives. It would abolish the "lump"
 

provided that suitable safeguards were written into the legislation, and there would be greater opportunities for local authorities to build than there are at present.
That would dispose of £250 million of the money arising from the measures that I have suggested already—

Mr. Mellish: Housing is a fundamental problem concerning all Members of this House and all local councillors. Is not it a fact that the biggest difficulty in housing finance is that every local authority that has been progressive in its housing policy in the past has incurred the most terrifying deficits? Would not it be practicable and sensible for any future Chancellor of the Exchequer and any future Minister of Housing to ensure that deficits which had been accrued as a result of the progressive policies of a local authority were dealt with at a fundamental level—in other words, by ensuring that housing revenue account deficits were removed so as to give councils a chance to build for the future?

Mr. Skinner: My right hon. Friend is perfectly correct. I am sure that he realises that in the present situation the deficits which have arisen as a result of all borrowing incurred over many years since 1919 are no longer a problem. The whole structure has been changed completely. However when we reverted back to the status quo the deficits accrued on building which took place before then would be abolished as a result of the subsidies handed out, and we should be able to start again from scratch. I have in mind houses which were built in the early 1960s at rates of interest of 6, 7 and 8 per cent. and in some cases 9, 10 and 11 per cent. It will need a lot of money. But in my view we shall not solve the problem unless we attempt it that way.
There are also more personal matters which require attention. I have in mind the personal incomes of those whom we represent and strive for both inside this House and outside it. In that connection my first objective would be to scrap value added tax. In itself that would not produce any money. By and large we should be back to where we were before, with a halved SET and with purchase tax. But here again it would be necessary to look at the rates of purchase tax on luxury items to ensure that


some redistribution took place there at the same time as we scrapped VAT. Here, too, we should be in trouble with the Pompidous of the world and with the Common Market.
There is a massive need for a pension increase, not of the order about which we heard in the Budget for October of this year but of the order of the one last demanded—and it may have increased by now—by the Old Age Pensioners' Federation, of £10 and £16. With proportionate increases in all the associated benefits, widows' benefits, the constant attendance allowance and the rest, this would necessitate the raising of between £800 million and £1,000 million, depending on how far the cutback in supplementary benefits was. In some isolated cases there would be a tax claw-back, too.
That sum of between £800 million and £1,000 million should be provided not by the Government, employers and employees but by the Government and employers alone. Employees should not have to take part in financing the exercise. We have already brought in £1,900 million. In this way something between £400 million and £500 million would be accountable to the Exchequer.
Family allowances would be increased by 50p for each child, with the first child being brought in. That would cost something of the order of £200 million.
I have also been reading about the effect of fiscal drag. It is notable in this Budget that the sum which has accrued as the result of wage increases purely to keep pace with inflation has resulted in about £600 million extra, and it is quite wrong that the tax threshold has not been lowered in response to it. Any effect of so-called fiscal drag should in any year be used to change the tax threshold, and it should be a continuing process in order to see to it that wages which were increased to keep pace with inflation were not diminished as a result of people having to pay additional tax.
Food subsidies of the order of £200 million would have to be introduced on all essential foods—milk, eggs, meat, and so on—consistent with the scrapping of the common agricultural policy.
Regarding fuel subsidies, we all know that within the next three or four months

we shall be subjected to massive increases in all the fuel supplying industries. The Electricity Council has already warned that it needs £116 million to balance its books. The European Coal and Steel Community is demanding price increases to maintain some kind of equilibrium with Common Market fuels. In order perhaps to infuriate and frustrate the EEC and to keep down the cost of living here for lower-paid families, pensioners, and so on, notwithstanding the increases which have been announced, I believe that we would need a subsidy of about £200 million to go part of the way to offset those increases.
Finally, on redistribution—there is a little more to go—part of the rest should go towards free prescriptions, school meals, school milk and travel. That would cost about £150 million, which would leave about £500 million in hand for the Government. I suggest that that £500 million should not be used to finance private industry in the way we are financing it at present to assist the regions, but should be used by a State holding company, call it what we may, as public investment in public industries in development areas. The £500 million should not be ladled out to private investors in order that they may line their pockets. Investment grants would have to continue, but they would then be phased into the public investment programme that was taking place in publicly-owned industries in all the development areas and, to some extent, in areas which need assistance from time to time.
None of these things can be done without complete control of the banks and insurance companies. The taking over of the banks and insurance companies is really a paper transaction, but the control which would be necessary to divert the money into the channels where it was needed means that there would have to be public ownership.
As far as the ports are concerned—

Mr. R. C. Mitchell: I am following my hon. Friend with great interest and agreeing with much of what he said, but so far he has only been tinkering with the capitalist system. He is now coming to the Socialist programme. I think that he should spend more time on his proposals for the nationalisation of the banks, finance


houses, and so on, as this seemed to be the core of the Socialist programme.

Mr. Skinner: It is the core of the programme. Without control of the City in that sense it is not possible to push money where it is needed.
For example, the housewife with her £20 a week, or whatever the amount is, to distribute on the various things that she needs, will sometimes fail, but, by and large, she will distribute that money because she is in control of it. So much will go on food. Various items will have to be cut back and others will be increased. So it is with the nation's economy. If there is a body other than the Government in charge of that purse, the money can be diverted in any way that that institution decides.
The Financial Times today has illustrated that bank lending over the last three months has shot up once again. This is despite the fact that certain restrictions—very minor restrictions—have been put on by the Government in the last six months by, for example, holding back special deposits and in various other ways. Instructions went out to the banks to stop or to restrain their lending to property companies. The net effect, notwithstanding all these suggestions, has been that lending to property companies in the last quarter has gone up by £176 million.
There is no doubt that we could not travel very far along the road to a Socialist programme without taking over the banks and insurance companies. Indeed, if we want to help people who are subjected to 10 per cent. mortgages, we shall have to take over the building societies as well. My right hon. Friend the Leader of the Opposition has challenged the Prime Minister on several occasions in the past two months about mortgage interest rates and whether the Government are to control them. He must know that the logical answer to a question of that kind is that the Government cannot control them unless they put in a subsidy to the building societies to keep down the interest rates. That would be a hand-out to investors in building societies. Therefore, this dilemma cannot be resolved unless the building societies, the banks, and the insurance companies are taken over completely.

Mr. Tugendhat: I appreciate the hon. Gentleman's logic. I see how, starting with banks and insurance companies, he moves quickly on to building societies. If he wants to make sure that the State is controlling the flow of money round the economy, as he puts it, and that investors are not distorting the will of a Socialist Government, may I ask whether he agrees that it would also be logical to take over pension funds, since they are substantial investors on the Stock Exchange? Surely it would be critically important for his programme that pension funds and, indeed, unit trusts should be taken over by a Socialist Government.

Mr. Skinner: I do not think there is any doubt about this matter. If pension funds are investing overseas—for example, in South Africa where we have the present slave labour argument, as is undoubtedly the case—then they would have to be controlled in the same fashion. I am not suggesting that money should not be invested to get a proper return in a country which is largely based on public investment. The nation now controls about 52 per cent. of our industry if we include local government, and so on. Therefore, I am not suggesting that we should prevent any return on capital for these pension funds. Such investment might be morally justifiable and could gain an even better return over a longer period if it were not subjected to the fluctuations of the present market system with which the hon. Gentleman is well acquainted.

Mr. John Mackie: I do not like to interrupt my hon. Friend because he is putting forward a fascinating argument. However, I have been trying to add up his two balance sheets. Did he mean in his scrapping of VAT and going back to purchase tax and SET that he would have a nil return, or did he think that he would get something out of them by taxing luxuries? On his raising of pensions, may I ask whether he was proposing to get the whole of the £800 million to £1,000 million from the Government and the employers? These two matters do not add up to the figures that he has given.

Mr. Skinner: I think that I spelt these figures out clearly. The scrapping of VAT, provided that we return to the status quo, would not make any difference


whatsoever. One could argue about the £110 million which relates to items subject to purchase tax, such as confectionery, and so on, but I have not introduced that aspect. There is about £1,300 million which would be channelled to the Exchequer as it was before through the 50 per cent. SET and purchase tax. When that has been done, and consistent with that exercise, there would have to be some changes in the levels of purchase tax on luxury and socially necessary goods to ensure a fair redistribution.

Mr. Mackie: Would my hon. Friend put a figure on that?

Mr. Skinner: The figure would make no difference. My hon. Friend is not looking the argument straight in the face. Through purchase tax and SET the Exchequer gets £1,300 million. There would be no difference in the amount of money brought in but it would be redistributed in the way that I have proposed.
My hon. Friend the Member for Old-ham, West (Mr. Meacher) has calculated that the amount of money that would be needed for increases in pensions and associated benefits of the amount that I have suggested is about £800 million. There is some argument about the figure. The TUC argues that it would cost more. But whatever money was required it would be found by the Government and by employers. They would each find between £400 million and £500 million. If anyone challenges my arithmetic, I assure him that it would be consistent with the amount of money that would be coming in and going out, provided that one takes account of the £500 million which I have suggested the Government should use for public investment purposes.
I do not want to delay the House for very long. I think that the case for public ownership has been made out.

Mr. Andrew Faulds: I think that all of us on these benches share my hon. Friend's social concern about economic management, and that very few would disagree with some of his arguments, but I am somewhat disturbed that he has not referred to the cultural concern of a Socialist Government. I should have thought that in his

exposition of the subject he would have mentioned the cultural programme. What figure does my hon. Friend postulate for that aspect of policy?

Mr. Skinner: As my hon. Friend knows. I have on a few occasions since coming to the House been involved in discussions on this matter. On one occasion I pressed for more money for brass bands because the instruments were being worn out leading demonstrations against the Government. My hon. Friend and I may have different cultural interests in that I do not attend opera and ballet as he does—

Mr. Faulds: I assure my hon. Friend that I find ballet boring, but enjoy opera.

Mr. Skinner: We have our own cultural interests of a kind, and they would all be developed in a Socialist programme.
It is important to establish why public ownership on a wider scale than at present is necessary. I have quoted a few examples to illustrate to any logical thinking person that the Government's record shows that to be the only answer. A few examples of that are Rolls-Royce, UCS and the shipping grant which allows the Onassises of this world and other Greek shipping magnates to take money from the nation's taxpayers.
Then there is the appalling record of maritime finance about which everyone was able to read in the Observer last week. Some Private Members' Bills have been introduced in an attempt to restrain pyramid selling, but if one considers this business of maritime finance and the way in which people are getting grants from the Government one realises that there is pyramid selling on a gigantic scale, with the Government acting as area managers.
What we are witnessing is not the complete break up of the capitalist system. That can never happen overnight, because the Government will do their utmost to prevent it. Tory Governments will always assist the capitalist system in its endeavours to continue controlling the economy, but we are now witnessing the Government having to take account of the facts of the situation and deal with things in a way which they would not have adopted a few years ago.
I referred earlier to changes being necessary in the machinery of Government. The first thing that is necessary in order to carry out a proper Socialist programme is to get rid of the annual Budget. I do not think that anybody can argue logically—and I think that some hon. Gentlemen opposite will agree with this—that if fiscal measures have to be introduced and if changes have to be made, it is necessary always to make them in March and April. Russia does not always get a bad grain harvest in March or April. Bad harvests occur at different times of the year. If the Government need to change their policy, God alone knows why it should have to be done in April and March.
If we want a Socialist set-up, and if we want to carry through a Socialist programme, I do not think that Government Departments can be run by so-called neutral civil servants. How can civil servants support a Tory philosophy one day, and then a few months later support a Socialist policy? People running a Socialist society must be oriented in a certain way. Their environment must prevent them from going beyond a certain point. I am not saying that the people now working in Government Departments are malicious. What I am saying is that there must be a different environment so that Socialist policies can be carried out. Without casting a slur on anyone who works in any Government Department, may I say that in my view there should be at least one political animal in each Department to see that a Socialist programme is pushed along with the greatest possible speed. One comes up against this problem not only in central Government but in local government, too, where I have had years of experience.
Standing Committees are a farce. Most Standing Committees work relatively easily, provided the legislation is not controversial. Some Bills now in Committee upstairs are being changed in a sensible way, but if there is a controversial Bill upstairs it is never discussed in proper detail. The Opposition argue against the Bill going through, without dealing with the detail and content of it, while the Government attempt by every means available to get the Bill on to the Statute Book They do not care how they get it there.
It is my view—and perhaps it is shared even by some hon. Gentlemen opposite— that if there is a controversial piece of legislation it should be allocated a certain amount of time even before it goes upstairs. If the Housing Finance Act had been allocated 150 hours there would have been a better discussion of the Bill and we would have improved it rather than have to wait for it to be altered in the other place. There should be a change in the construction of Standing Committees and, as I said, there should be an allocation of time for controversial measures.
I might offend some of my hon. Friends by saying that Members of Parliament, and particularly Labour Members, should be prepared to have a register of interests. The Liberals do nothing but argue that they do everything that is necessary and wonderful in Parliament and outside. The fact is that they have, not a register of interests, but a scrap of paper in the Liberal Whip's office setting out some of the companies with which the Liberals are involved. What I want is a register of interests which will shown that I am a Member sponsored by the National Union of Mineworkers—everybody knows that anyway—and what my constituency gets and what I get as a result of that sponsorship.
Many of my hon. Friends think that this is not only necessary but vital, to refute some of the criticism and political cynicism among the public, and not just as a result of the Poulson case.

Mr. Raison: If hon. Members declared their interests in this way, would they be precluded from taking part in any debate?

Mr. Skinner: Of course not. I was on a local authority for a long time and I made absolutely sure that all the houses built in Clay Cross at that time used solid fuel. I took special measures to see to it that rule 76b, I believe it was, allowed me to do just that. There should be no argument providing hon. Members declare their interest. Otherwise, I could not take part in coalmining debates but would have to speak continually on economic matters.

Mr. J. D. Concannon: On this question of interests, I understand that my hon. Friend has also received a


copy of the letter that I have had this week, about which I am particularly perturbed, from BUPA in the Midlands. Would he not agree that, if any of the speakers taking part in Monday's debate have accepted any offer like this and announce it before they speak, the House will know what is going on?

Mr. Skinner: This is my point. The register of interests would help in this way, and without leading one hon. Member to spy on another. If there were something in addition to the register, that kind of example would have to be declared. The more that that is done, the better the chance for parliamentary democracy to survive.
I cannot guarantee that it will survive, because many of the things that I propose may never be taken up by any Government. I hope that they will, but I have to warn that if we continue on this path, there is a real danger that cynicism and intolerance will prevent us from going any further.
I do not want to stress the argument about holidays too much, except to say that, if we worked a longer period in the House and finished at 12 every night, not only would we appear to be more sensible but we would be more in line with the man in the street who wants to see us doing a reasonable job.

Mr. R. C. Mitchell: How many of them finish at midnight?

Mr. Skinner: I have worked in an industry in which we did shift work of all kinds. There is a big difference between grovelling on my knees in a 2 ft. scam or a 10 ft. gate and taking part in in a job which is generally satisfying.
In any private or nationalised industry there is a need for workers' control and workers' representation on the boards— and not just workers over 60, either. The hon. Member for Rochdale (Mr. Cyril Smith) got a big splurge in the Press when he said that the works committee principle of the Liberal Party would assist workers. On inspection, I found that in his factory the hon. Member has only 44 people. Presumably the works committee principle starts beyond that figure.
But that is not the answer anyway. There have been consultative committees

in nationalised industries for the greater part of 20 years and it was evident to me that they gave no control. I do not want to rehash comments that we have heard about the Coal Board buying supports and so on. If we had been associated in the control of that industry, some of these things would have come to light and would have been prevented.
Education will be dealt with by my hon. Friend the Member for Southampton, Itchen (Mr. R. C. Mitchell). I have only one suggestion for him, namely, to introduce education commissioners along the lines of the housing commissioners, to ensure that all the defaulting Tory authorities go comprehensive. Many pieces of Tory legislation, including Bills at present before the House, could be used to take over the commanding heights of the economy. I believe that my right hon. Friend the Member for Bristol South-East (Mr. Benn) will deal with this in the Sunday Times next week. I threatened to deal with it today, but I thought that it would be unfair to produce a trailer for my right hon. Friend.

Mr. Raison: Before the hon. Gentleman finishes his interesting speech, could he tell us whether he is a Marxist and whether his programme would be Marxist?

Mr. Skinner: I do not get involved in these arguments. I admit that I got beyond the first page of Das Kapital, but, as for Marxism or Leninism, I think in terms of the people I represent and the people I have been brought up with. If that happens to reflect one kind of Marxism which is advanced by a certain section of society, so be it. But mine is a kind of simple philosophy, exemplified in some ways by things that I did in local government. It is merely an extension of that.
Of course, my argument means a takeover of all the major organs of the State and industry. The hon. Member's Government are trying to do that—or rather, have been made to do it in certain ways —but at the same time they want to draw back for fear of offending people such as the hon. Member for Aylesbury (Mr. Raison), and others who are not present. So he should not argue about social ownership. As I have already said, public expenditure accounts for 52 per cent. of our total expenditure.
These are the first cautious but nevertheless important steps to a Socialist society, which would take income from those who have and give to those who never had a chance in life. In a five-year Parliament with this sort of programme we could banish all means-testing from the social services. Some, like the hon. Member for Aylesbury, will say that it will remove the incentive, but the sort of hustling, bustling, competitive society to which he still hankers to belong has not produced the answer. Therefore, there has to be a Socialist alternative.

12.20 p.m.

Mr. Jeffrey Archer: I rise as leader of the opposition to the "Chancellor's speech" and therefore, as is traditional, I congratulate him on the manner in which he delivered his speech. None of us could but have admired his delivery, whatever one thinks about his views.

Mr. Raison: One omission from the programme for the reform of Parliament that the hon. Member for Bolsover (Mr. Skinner) put was any curtailment of lengthy speeches. Could my hon. Friend comment on whether that would be desirable?

Mr. Archer: I thought that the hon. Member for Bolsover (Mr. Skinner) set a tremendous example. When he is Chancellor, if he can keep his speeches that short it will worry the Stock Exchange more than it will worry Members of the House of Commons. But I want to make a small complaint to the hon. Gentleman. I informed him that I was leader of the opposition but he did not let me have a copy of his speech. I congratulate him on his comments about reading the Financial Times for the last two weeks. I think that must be probably two weeks longer than the right hon. Member for Leeds, East (Mr. Healey) has been reading it.
I also congratulate the hon. Gentleman on the Cabinet he has chosen, and on the hon. Members he has selected to support him today. He has gathered in the House—and I congratulate him—as big an audience as the right hon. Member for Leeds, East does, and I see some

hopeful faces. For example, I congratulate the hon. Member for Southampton, Itchen (Mr. R. C. Mitchell) on his appointment as Secretary of State for Education and Science. Looking around me with interest, I see also the hon. Members for Derby, North (Mr. White-head), Wandsworth, Central (Mr. Thomas Cox), and Kingston upon Hull, East (Mr. Prescott). I can see that the hon. Member for Bolsover will have a most interesting Cabinet. I am sure he will agree that there are some very worried faces on his own Front Bench whose owners are wondering how they are to fit in to his programme.
I see the hon. Gentleman's budget as a "rich to poor" budget, which many Socialists have already suggested in this House. My line of argument is that it is as unrealistic as to pretend that a competitive society does not work. I shall begin with the hon. Gentleman's proposed wealth tax. He is a courageous man in that, unlike so many politicians, he always tells us everything. In his budget delivery he did not hide any of his figures. For that I admire him greatly.
I was fascinated to find that with the wealth tax he would start at £25,000. I can say without hesitation that if he started a wealth tax at that figure a Labour Government would never be returned again. The threshold would be so low that it would catch the vast middle section of our people, who now have houses worth almost that, since presumably, if I understand his case, houses would count. That being so, the wealth tax would apply to almost 50 per cent. of the population.

Mr. Skinner: When speaking of a wealth tax beginning at £25,000, I referred to the problem of inflation, which also applies to property. I thought I had qualified the position to some extent by saying that the rate could be modified in the light of inflationary effects. Indeed, one could argue that £25,000 would be too low in respect of property. But the principle would be to exclude housing as such. But even if housing were included at £25,000 we would be talking in terms of £125 million at 0·5 per cent. interest, which would be amply covered by the tax reliefs likely to be received.

Mr. Archer: I see.
I was also fascinated by what the hon. Gentleman had to say in complaining about the powers which the European Parliament now has. He complained that it has fewer powers than a parish council. I understand that his way of getting out of Europe—which is not yet official Labour Party policy—would be to create total confusion and financial ruin, thus making Europe want to get rid of us. That is one of the most novel suggestions we have yet heard.
The hon. Gentleman put forward the theory that all deficits on housing revenue accounts of local authorities should be removed. That would be very dangerous. It is impossible to be absolutely accurate without looking up the figures very carefully, but I suspect that we are talking about £1,000 million, if not more, over the whole country. That scale of removal would, therefore, totally unbalance all his other financial figures.
The hon. Gentleman also wants to remove value added tax. He said that he would be happier to see a half selective employment tax plus purchase tax. But surely the Labour Government would have levied the whole of SET and the whole of purchase tax, so that value added tax is in that sense a tremendous advantage because, at the end of the day, it is cheaper than the whole of SET and the whole of purchase tax.
I have one question on which I hope the hon. Gentleman will interrupt me with a reply. The subject worries me. The hon. Gentleman referred to pension funds, which apply to the poor as well as to the rich. Indeed, I suspect that they will apply more to the poor in future, and that more people are getting involved in them than ever before. Most of the pension funds get their returns from investment. The hon. Gentleman's views on investment would lead to the almost total breakdown of the capitalist system as such.

Mr. Skinner: Mr. Skinner indicated assent.

Mr. Archer: I accept that that is the hon. Gentleman's argument. But that being so, I wonder how the pension funds would make their money in order to be able to pay pensions to those who had put their money into them in the expectation of getting pensions in return.

Mr. Skinner: I did not have a chance to deal with every factor. What the hon.

Gentleman suggests might be a marginal difficulty, but we should be introducing legislation to see to it that all people have security in their retirement, with the net result that the need for pension funds would end. I point out that the miners' pension fund provides a pension of £1-50 per week. While, at the beginning, the return for pension funds would be a problem, as the new scheme came in over a period of years, providing as much as two-thirds of wages in pension form after retirement, the problem would cease to exist—except, perhaps, for some of the hon. Gentleman's rich friends in the City who, in my view, would not matter anyway.

Mr. Archer: I accept that this is (he argument of the Socialist philosophy, but the facts point to the conclusion that those engaged in private investment for pension funds have been more successful than those who have to do it at national level. Despite the hon. Gentleman's dislike of those he calls the "speculators", if they get involved also at national level in helping the poor they inevitably seem to make a better job of it than the civil servants or the professional 9-to-5 people seem to do. However sound his idea may be in theory, it would not work at the end of the day.
The hon. Gentleman said that the rest of his Cabinet would be reporting on other matters, such as means testing, deficits, and people's ownership. Surely this is a philosophy for the lazy. It is easy not to do a day's work if one knows that the bread is there at the end of the day anyway. With that sort of programme one can easily drift towards such an attitude, and I do not think that at the moment the country needs to drift any further towards it. On the contrary, I think it needs to develop an attitude to work harder, earn more and succeed more.
However, there were elements in the hon. Gentleman's speech with which I totally agreed, and I would support him on them.

Mr. Raison: Perhaps the hon. Member will give my hon. Friend a job.

Mr. Archer: I thing I could serve with him in his administration. I certainly hope that something will be done about pensions. At this point I am not aiming


what I say at the hon. Gentleman, because he was not here between 1964 and 1970, but an immense amount of hypocrisy is talked by the Opposition about retirement pensions. During the six years of Labour rule the old-age pension was increased by £1·63. During three years of Conservative rule it has been raised by £2·65, in real terms. Despite Labour hon. Members leaping up and down and talking about inflation, the increase of £2·65 represents a 50 per cent. rise, in real terms. It was a Conservative Government that brought in the annual review of pensions. It was we who brought it to top priority. I heard in the corridor the other night—no doubt I shall be told off for this—a remark made to my right hon. Friend the Secretary of State for Social Services, "The trouble is that you have had too much of the pie." In fact, my right hon. Friend has been one of the most successful Ministers of this century, and will be remembered as a radical reformer of social services. Honest Socialists will be the first to say that they would have been proud to have him as a Minister in the last Government.

Mr. Arthur Latham: I was hoping that the House would try to continue the debate on the wider philosophical grounds which my hon. Friend the Member for Bolsover (Mr. Skinner) introduced. I do not think that my hon. Friend would want to argue that the pension record of the last Labour Government was adequate. My hon. Friend indicated that the record was not good enough for him, as it did not carry out the programme which he envisaged.
The hon. Member for Louth (Mr. Jeffrey Archer) has been putting forward his criteria for determining a competitive society. Notwithstanding the remarks which the hon. Gentleman wants to make about the record of the present Government, does he consider that the competitive society is working successfully when it expects a pensioner to survive on £6·75 a week when others can make millions overnight in property deals? Is that the right basis for a fair society?

Mr. Archer: I take the point made by the hon. Member for Paddington, North (Mr. Latham). I think that I paid the hon. Member for Bolsover the

courtesy of saying that he was not an hon. Member during the last administration. I accept that there are Labour hon. Members who feel that the last Labour Government did not do enough. However, Conservative Members who feel seriously about the social services find hypocritical the shouting from the Opposition benches. Despite the fact that not enough is being done, and that too many people make vast sums overnight, at the end of the day we can claim to have done more than the Labour Party.
It would come better from the Opposition first to congratulate us on what we have done and then criticise us, rather than just to criticise us.
I agree with the hon. Member for Bolsover that family allowances should be increased. I was disappointed when my right hon. Friend the Chancellor of the Exchequer decided to remove the tax on confectionery and ice-cream. I should have liked to see it doubled. If that revenue had been directed to family allowances, it would have taken care of the hon. Gentleman's suggestion. That is only a movement in one direction instead of another, but it is one which I should have liked to see take place.
I cannot agree with hon. Member for Bolsover about prescription charges. Both Labour and Conservative Members thought that it was wise to raise the school leaving age. There was much academic discussion about that. I suspect that if there had been a free vote the result would have been close. The school leaving age was raised from 15 to 16 years but the exemption from prescription charges still ceases at 15. I should like to see the exemption continued to 16. It is a ridiculous situation.
It is common of a Conservative Government—and common of our present Front Bench—to put everything in total academic and financial terms and not to worry about the little things that worry the people in our constituencies. I hope that if anything comes out of this debate—I hope that the hon. Member for Bolsover supports me—it will be the raising of the exemption limit in respect of prescription charges to 16 years.

Mr. Raison: Does my hon. Friend apply that argument to fares?

Mr. Archer: Yes, I do. The wide spectrum of charges which apply to the 15 to 16 age group, wherever school children are affected, should fall into that category. My criticism is that the Conservative Government has the habit much more than a Labour Government, of saying, "Here is £1,000 million. The best way to spend it is X, Y and Z." If hon. Members say, at the end of the day, that the middle suggestion, although sensible, is eminently unfair, they never seem to take that as an academic argument. I am fighting this case with support from Opposition and Government hon. Members. I hope that the Chancellor of the Exchequer will tell the House that he will make this change.
The hon. Member for Bolsover knows that I voted against the school milk measure. I do not have to pretend where I stand on that, or on museum charges. I was told the other day that my record is almost as bad as that of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), although we were never in the same corridor together.
Many of the points made by the hon. Member for Bolsoyer should be taken seriously. My criticism of my party is that on minor issues, such as museum charges, school milk, prescription charges and the abolition of the Consumer Council, we earn a bad reputation. We say, "Let's spend the big money properly, but let us get as much of a bad political reputation as we can for the minor sums." We get the reputation of being an unfeeling party. I hope that we will spend the next 18 months to two years, until the General Election, not only reminding the people of the big things that we have done correctly, but showing them that we care about the little things that matter to so many people.
I agree with everything said in the Budget debate about inflation. The only thing we are fighting is inflation. If we could get that one evil genius under control society would be in a far better position. I realise that many hon. Members will have philosophies that guide them in different directions. However, if we had inflation under control—and I accept the Chancellor's argument that it is a world problem, but we seem to be a step ahead of the rest of the western civilised world because our inflation problem seems to be bigger than any-

body else's—society would be in a stronger position.
We must consider the problem that faces farmers throughout the country when they want to pass on their land to their children. I should like to know what the hon. Member for Bolsover privately feels about that. If a farmer leaves his land to his son to farm and the son has no intention of making a capital gain out of the land, he should be allowed to farm it without death duties, which are financially crippling. If the son does not wish to be farmer, and wishes to make an immediate capital gain from the sale of the land, he should be taxed and taxed heavily. What should not happen, if he wishes to continue to farm as his father farmed, is for his land to be chopped up or for the tax to be so high that he must go into industry or into a job elsewhere and not continue as a farmer.
We have been gutless on this issue. I hope that before the 18 months are up we will have the courage to tackle this problem, with farmers in mind.
I want to make on specific point to the hon. Members for Paddington, North (Mr. Latham) and Bolsover. It is very hard for a rich man in the Conservative Party to prove that he is sincere about working people—

Mr. Sydney Bidwell: Or to enter the Kingdom of Heaven.

Mr. Archer: I am glad that the hon. Gentleman said that. Rather than quote the Sermon on the Mount, I was about to say that it is harder for a rich Conservative to prove that he is sincere than it is for a Socialist to climb through the eye of a needle. It is amazing how many Opposititon Members think that because one has made money or has had the luck to be born to money one does not care about others who do not have money. It is easier for a poor man in the House to say that he cares and to sound sincere. At the end of the day I believe—I hope that the hon. Member for Bolsover agrees with me—that the division of caring is fairly even on both sides and that the division of hypocrisy is fairly even on both sides.
Finally, I say this as a rich-to-poor man's Budget, and I did not agree with it. I congratulated the new Chancellor on his delivery, which was outstanding.


I hope that his Government Front Bench will take up as policy and carry out everything that the hon. Member for Bolsover suggested; because, should they do so, we will remain in power for the rest of the century.

12.42 p.m.

Mr. John Prescott: It gives me great pleasure to congratulate my hon. Friend the Member for Bolsover (Mr. Skinner) on his excellent speech. When he rose last week and put his hands above his head when he was given the right to have this debate, there were undoubtedly many people worrying about what he would say, because of the controversial statements that he makes in the House.
Whatever the views of individual Members about that, perhaps I should declare a vested interest, because my hon. Friend and I share a flat. Apart from the excellent delivery of his speech, it was completely logical and full of facts. Although many people may not agree with my hon. Friend's conclusions, he presented a serious argument that challenges many traditional views which are advanced about the economy.
It warms my heart to hear views expressed such as those to which my hon. Friend gave voice—from whatever quarter of the House they come—about an alternative economic system—for I entered politics hoping to change our present economic system. I fully accept that we shall not see a change in the present economic system through parliamentary democracy. However, that is part of our political objectives, and one lives in hopes.
Because my hon. Friend spoke to a broad remit about the economy I shall go into some detail about two spheres of policy and draw the attention of the House to the consequences of our present economic system, which is the capitalist system. I shall then point out what would be achieved by the Socialist alternative, which we believe we must implement to correct the many manifestations of ill-will created by the present system, which we identify economically as the capitalist system.
I shall draw on my own experience in two industries, namely, the docks and shipping. It is important to do this,

because when dealing with broad philiso-phical points in debates such as this those of us who hold these views are often accused of not thinking them out too carefully and of not having an alternative to present. If one advocates change, one must justify one's criticisms of the system and then one is bound to suggest what one thinks is the best alternative and why one thinks it is better than the present system.
There is not much time today to do this in detail. One is always concerned about whether one is boring one's colleagues. My hon. Friend the Member for Bolsover, who spoke for more than one hour and a quarter, held the attention of the House in a very interesting speech. I shall not attempt to equal that difficult feat.
It is appropriate that today I should talk about the docks, because on 31st January the National Ports Council produced a report. The Government yesterday released that report and recommendations of the National Ports Council concerning the problems in the docks industry. Most people here will be conversant with these problems— problems particularly of the development of small wharves and the consequences on the development of major ports.
Hon. Members know that I represent the third largest port in the country. I do not want to lower the tone of the debate by making what may be thought to be a constituency speech. I assure the House that it will not be a constituency speech. I shall refer to my constituency because it is one of the major ports affected by this type of development, which the Government directed the National Ports Council to examine particularly. Because I have been doing some studies of problems in my area, I am more conversant with the detail of the argument that I wish to present today in relation to that area. I shall not go into all the details and dot all the i's and cross all the t's. I shall merely present the conclusions at which I have arrived. I hope that anyone who wishes to pursue a point that I have made will raise it with me after the debate.
My constituency, as a major port, faces the consequences of losing over one-third of its traffic—a reduction from 10 million tons to about 7 million tons in commodities such as timber and grain. A


number of reasons have been advanced why this major port has lost all this traffic. Some of the reasons are technological, with the advent of the container system which means that, for example, bulk cargoes of fruit can be brought from Australia and trans-shipped by freight-liner to inland ports.
I want to deal with the question of diversion or trans-shipment of traffic. In the last few years Humberside has seen a proliferation of wharves, some of them only small constructions, cheap to build, as the National Board Council points out, and inexpensive to run. It is profitable for many owners to set up such wharves and offer facilities for shipowners to bring cargoes to the wharves.
This has encouraged a tremendous trans-shipment of cargoes, particularly of timber and grain. Hull has lost over 1 million tons of timber traffic and almost 1 million tons of grain traffic. Grain is brought in huge ships to Rotterdam and then trans-shipped to small ships instead of the 25,000-ton vessels which in the past took it to Hull. Hull has lost that traditional traffic, because it is going to the small wharves.
A number of reasons have been advanced why this should happen. It is important to understand this, because the Government base their policy on a belief. They believe the management assertion that the trouble is the result of industrial relations. This is the first explanation that springs to the minds of those who do not want to study the problem too seriously.
Industrial relations may have deterred some traffic from going to Hull, but the real point about industrial relations is that their present state is a symptom of the problem and not the cause. Someone who spends all his time on the symptom will not solve the problem—he will merely expend a great deal of energy.
The reasons lie elsewhere. I will mention one or two economic reasons. By the very nature of the capitalist system, those who have and control the means of production wish to use it to make profit. One way of increasing profit is to reduce costs. To be able to unload cargoes cheaply is attractive to companies because they are enabled to increase their profits. To unload a ton of grain in a small wharf will cost 17p. In Hull

the cost is 64p a ton. That is a strong incentive to a shipowner to transfer the cargo to a small ship and send it to the small wharves. Divorcing labour costs from our considerations, to import about 1,500 metres of timber in Hull in 1972 cost £540 to enter the dock alone. The cost of entering a wharf is £200. The shipowner gets a substantial cost saving if he goes to the place where he can unload at the cheapest cost.
The problem at Hull is that costs are too high. There are many reasons for this, arising directly from the policy of the present Government. The Government, holding the view that competition is the best means of allocating resources, have decided that conditions should be encouraged whereby people compete with each other and attempt to get a proper rate of return on their capital. Large amounts of money are loaned to the docks. A lot of capital is invested in order to build up modern ports, and one is left with a problem of high capital charge and high interest charges.
The Government's policy is apparently that shipowners should shop around for the cheapest port. The consequences of that action within our capitalist system are not considered. The Government's concern is for the economic costs and not for the social costs. The Government have decided that the return to be expected from the British Docks Board, which at the moment is 5·5 per cent. of its assets, should be increased by 1975 to 9 per cent., despite the protests of the Select Committee of this House which recommended that that view should be reconsidered. Charges will be increased yet again, as will the debts on the ports from which more and more traffic is being moved away to cheaper ports, or else they will have to increase their charges, and if they increase their charges, more traffic will leave those ports.
It is different in a port like Southampton, which had a £900,000 deficit the year before last and which turned that deficit into a £500,000 profit by increasing its charges by 48 per cent. Hull tried to do the same thing, but could not keep the cargo. The cargo went to the small wharfs. Dockers' protests reflect the view that this problem cannot be solved within that context.
What the Government do not seem to appreciate is that the consequences are


not solely on the port industry but are also reflected in the local economy, particularly if the local economy is transport based, as is that of Hull. The rail industry no longer has a bulk commodity to carry, and it becomes ever dependent on grants from the Government. Road transport has become congested, and road transport costs from Hull have become more expensive than the national average. The waterway industry is experiencing a decline in traffic. The shipbuilding industry, an important sector of Hull's economy, is running down because we are closing the dry docks in order to attempt to cut costs. In effect, any policy involving the Docks Board has a tremendous effect upon the local economy.
This problem cannot be solved by forcing the docks to compete with each other without taking into account the direct consequences of such a policy. The dockers are fighting this policy tooth and nail. I myself have joined the picket lines in that fight because it is right to bring home to the people the seriousness of the cause of this problem. It cannot be solved by any solutions proposed by the present Government. It can be solved only by a Socialist policy, because a Socialist policy involves taking over the means of production. It is designed to assist industry in order to benefit the community and not to serve the selfish greed of profit.
The terms of reference of the National Ports Council inquiry were to look specifically into the problem affecting the ports industry. Today we have the report. From the Press reports that I have read, many of the reporters seem to have relied on the recommendations instead of having studied the report, and, as a result, they have misrepresented the position. It is confirmed that the labour on the wharfs is casual labour. The conditions of employment are the same as those which existed in the industry before the Devlin inquiry under the Labour Government. Facilities for training are lacking, and the men are working long hours and are exploited by the employers. On such wharves the costs are cheaper, and this has highlighted my argument about the financial problems and the heavy debt charges in the major ports in which capital has been invested in order to meet technological changes.
According to the recommendations in the report, an attempt should be made to equalise the costs between the small wharves and the large ports. I hope the Government will produce their recommendations very soon. We shall be pressing the Government because this is a very contentious issue in my area. The report says that the wages paid should not be less favourable than the standards laid down for the industry by the National Joint Council for the port transport industry. Hon. Members may think that that is a victory, that we have now got the rate for the job—a Socialist principle. One might think that the dockers all get paid the same rate for the job. I must admit that, on first reading, I thought that was so. But then one notices that the report refers to the National Joint Council rates for the port transport industry. It means that the men will now get £23 for a 40-hour week. In Hull the docker gets £39 for a 40-hour week. The point is that the modernisation payment is added on to the basic wage of £23, and it means that the men on the wharf will not get the same wage as the docker who is doing the same job. The men on the wharf are to get half the wage. In order to get the same wage as the dockers who are doing the same work, they will have to work many more hours, as they have been doing in the past.
This is another example of the exploitation of labour about which the National Ports Council has done nothing. However, I congratulate it on recommending that the Government should end the casual labour system on these wharves. The Labour Government faced the problem of casual labour on the docks, and I hope that the present Government will have the courage to tackle the same problem on the wharves and so improve conditions for the men employed there. What is the Government's position? I hope that soon we shall get to know.
The recommendations are clear and they are welcome in that they say that amenities should be improved up to the standards in other dockyard areas and that contributions should be made to the scheme fund. The essential point is that they do little to equalise labour costs. I have argued that capital costs are a burden on the major ports and that small wharves have cheaper labour costs, and shipowners shop around for the


cheapest service, and will weigh in the interests of the small wharves, with the exploitation of labour which is being paid half the rate for the job.
It is only a symptom of the problem. The cause is the policy pursued by the Government, the capitalist policy, the idea that competition will solve everything, and all the problems of our ports, but, as Lord Rochdale showed, it has not, and it has not produced the investment needed, and that is why we had backward ports, because the system has failed.
Now, therefore, we have to have an entirely different policy, and it has to be a Socialist policy, because it means control and using the ports in the interests of the community, in the interests of regional development. That is the antithesis of the essence of the capitalist system.
Modern ports require massive public investment. Ports such as Hull have been undermined yet again by a typical Tory ploy despite the fact that millions of pounds of taxpayers' money have been spent in the last few years. Small wharves are beginning to increase again and this report will not affect that.
The emphasis must not be on only the financial costs. Social costs have to be taken into account. We have that argument about the London tubes where the social costs are taken into account. What was Clydebank if it was not an argument about social costs? That argument was enforced by the men of Clydebank. It had to be taken into account. That is the argument about BSA. What will happen if we allow that company to be a failure, remembering the employment it provides? The social factors and the social costs have to be taken into account, and they are not being taken into account in the docks industry.
Therefore we have to have a Socialist alternative. Even if we have the philosophy of competition, those who favour it say that it has to be fair competition, but what we are finding developing is not fair competition in the docks industry. The shipowner goes to the cheapest area. That is the reason I say that the small wharves have this advantage, but they cannot compete fairly. Fair competition cannot be applied. All it can do is to continue the further decline of ports— not only at Hull—and the local economy with increased unemployment. In my

area it is already at extremely high levels. The alternative is to take over the means of production and to plan our ports system as part of an integrated link of sea and rail and road. It has to be done by a central co-ordinating body. The Labour Government, in its Ports Bill, which, unfortunately, was lost, provided for a central authority. I had some criticisms of that policy but it provided for a central authority.
The report which has come out today certainly fails. It provides plenty of analysis but pays no regard to control. Section 38 says:
In the councils' view the possibility of tighter control on a national basis can only be looked at as part of the case for promoting a much high level of co-ordination in planning new development and investment.
Precisely. That is very much our view. It goes on:
The ports are not an industrial undertaking under single ownership and management, so that the co-ordination of planning without the ultimate responsibility for executing those plans or for their financial implications presents special problems.
Again, that is an argument for having a central authority. This is what Socialism would do. It would provide economic control, not relying upon the contingencies of the market system to determine the allocation of resources in society.
Therefore, while I welcome the report, in that it does recommend the end of casual labour, it deals with symptoms and not with a solution of the problem and that in itself is tragic. It says that we must look closely at the control of port economics, and the economics of development, but they are considered already by the Ports Council and various bodies. It has missed a great opportunity, and that is an indictment of it. It has lacked the courage of its convictions to recom-ment the necessary alternative, which in this case is the Socialist system.
I wish to conclude with a few remarks about the shipping industry. For reasons of time I shall not go into it at length. For those who think I should speak about the nationalisation of the shipping industry, about investment and improvements, I suggest they look up HANSARD of 10th December 1971, when I put the argument, and when I discussed the various schemes and the needs, especially in the coastal areas, in the light of technological changes


and how the industry could be advanced and more efficient use made of our resources. Hon. Members can find it in HANSARD of that date, if there are any copies left.
I deal with one aspect today, and that is the consequence of pursuing policies for increasing the amount and level of profits with dire social consequences. That is what I want to draw to the attention of the House.
My hon. Friend's motion talks of a "One-nation society". That is something which reminds us of the Prime Minister. It evokes memories of his talking of a "One-nation society". I am sorry that the Prime Minister is not here today in view of the close relations between my hon. Friend the Member for Bolsover and the Prime Minister in their views of what should be done.
Nevertheless, we must consider the private sector in shipping and the development of a "One-nation society". The British shipping industry is a very important part of our industry in this country. That is not too often recognised because it plays a secret role. There have been many advantages in playing a quiet game. It has done so very effectively. One aspect of its policy is to employ foreign labour in British ships.
We have seen recent publicity in The Guardian, in which there have been pertinent reports on the terrible labour situation in South Africa. Companies have been surprised and embarrassed by detailed reports in The Guardian about very low wages paid to labour in South Africa. In fact, The Guardian has exerted some pressure which we must maintain.
But there is foreign labour in British ships, and that is part of the exploitation which goes on and which helps to provide the profits for companies such as P & O. It was interesting that when there were merger talks, it was said to be profitable—but for many years it had been claimed that there had been no profits. Opinion changes according to circumstances.
The employment of foreign labour in British ships means increasing the profits, but what are the social consequences? The extent of foreign labour in British ships is one third—that is, 30,000 people,

20,000 of them Asiatics, apart from Africans, Chinese, Indians. It has always been the case because the British shipping industry was one of the major employers in the world. It has for a long time been so and it will be so, and it may make a contribution to the third world in providing employment. We must recognise, though, that it does not have to be labour which has to be exploited by employment at cheap rates—at rates on which people cannot be reasonably expected to live.
Many British shipping companies, some with household names like Cunard, Cunard-Brocklebank, P & O, British Commonwealth and Ellerman Lines, depend a great deal on foreign labour. The trade unions with their international solidarity fight to combat capitalism. There is international ILO legislation which provides that the lowest wage to be paid to seafarers shall be £48. In 1958 the ILO recommended a minimum wage of £25. In 1972 British shipowners negotiated a rate of £26 a month for Asiatic labour. That rate is not even equivalent to the minimum rate the ILO recommended in 1958. Bangladesh has just negotiated a minimum wage of £16—well below the minimum rate. The Government, the companies and the unions were parties to that ILO recommendation. The ILO has also recommended that facilities should be provided in this country to enable seamen to receive the deficit if they are earning less than the minimum wage. I have put down Questions on this subject to which I hope answers will be given.
The African seamen who were taken off the ship were receiving £38 a month— below the South African poverty line. Through the union's action, those seamen have now been given a British rate of £90, which will apply to all other Zulus employed on other ships. That has been done through the pressure of the trade union acting internationally and forcing companies to pay a reasonable wage. What are we in Parliament doing about this problem?
Because of the delay in the printing of HANSARD I was not able to inform the hon. Member in advance, but the Foreign Secretary was asked by Mr. Ian Lloyd—

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. Member tor Kingston upon Hull, East (Mr. Prescott)


should refer to the hon. Member by his constituency.

Mr. Prescott: I am sorry, Mr. Deputy Speaker. The hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) said:
Although South Africa, very regrettably, has only herself to blame for the long-standing and often hysterical preoccupation of the Left over conditions in that country, will Her Majesty's Government resist most strenuously the temptation to assume some sort of broad moral responsibility for economic and social conditions in a part of the world for which we ceased to have responsibility 63 years ago?" —[OFFICIAL REPORT, 21st March 1973; Vol. 853, c. 426.]
I support my hon. Friend the Member for Bolsover in canvassing for a register. He and I probably go further on this matter than most hon. Members, even those within our own party.
It may not be known that the hon. Member for Langstone is the economic adviser to the British Commonwealth Shipping Company. For this information we have to rely on Andrew Roth, who I presume to be correct. The hon. Member who speaks of our having no responsibility is the economic adviser to the company which exploits seamen by paying them such low rates of pay. He speaks of Parliament having no respon-sibility, although he has a responsibility for the employment of these men. That is hypocrisy—

The Minister of State, Treasury (Mr. John Nott): The hon. Gentleman is referring to the interests of one of my hon. Friends. I imagine that he let my hon. Friend know that he would make these allegations, because I feel sure my hon. Friend would wish to say something in answer to the hon. Gentleman.

Mr. Prescott: I take the hon. Gentleman's point, and I am conscious of my responsibility in raising these issues. I am sorry if my decision to raise this issue reflects on me. I will meet the consequences whatever they may be. I tried to warn the hon. Gentleman but there was not sufficient time. I am merely pointing out a certain inconsistency. No doubt I shall hear something more about it.
Although the Government have a rôle to play in this, they are doing nothing to improve the situation. These are British shipping companies' and the Government should use their influence to get them to

pay reasonable wages. But the situation is even worse, for the Industrial Relations Act makes it illegal for the trade unions to do what they have always done, that is, to act on behalf of workers who are being exploited by ship owners, by refusing to handle the cargo. The Government's legislation reinforces the exploitation of these seamen. I pointed this out when we discussed the Industrial Relations Act, but what I said was not heeeded. If the dockers decide not to service a ship which is employing underpaid workers they have to break the law. Are there any hon. Members who think it wrong to break the law in that context? We are bound to do so unless we allow that exploitation to continue. I hope that those who argue about the rule of law will look seriously at the way the Government's legislation reinforces the exploitation of foreign labour by British companies.
I have attempted to talk about the Socialist alternative to the capitalist system which is motivated by profit in the context of the ports industry and to show that the alterative can only be a Socialist policy which we shall implement when a Labour Government returns to power. This House has a moral responsibility to implement the ILO legislation and the industrial legislation to improve the position of seamen and to move towards the Socialist alternative.

1.8 p.m.

Mr. Timothy Raison: It is deplorable that the hon. Member for Kingston upon Hull, East (Mr. Prescott) should have attacked one of my hon. Friends without making any attempt to warn him that he would speak in such a way. It is particularly deplorable because the subject of the debate has precious little to do with the topic on which the hon. Gentleman has been speaking. Had we been debating the shipping industry, there might have been some shred of excuse for raising the topic in that way, but since the motion has precious little to do with what the hon. Gentleman said, I consider his conduct to have been very sad.

Mr. Prescott: May I correct the hon. Gentleman? The motion refers to the creation of a "One-nation society". I was arguing about white men and Asiatics employed on the same vessel where the white men earn twice as much


for doing the same job as the Asiatics —and sometimes three times as much. While men work in those conditions we shall not create a "One-nation society", and I think I am right to argue on that topic within the context of the motion.

Mr. Raison: The hon. Gentleman used the occasion of the debate to make a speech on shipping and the ports. He knows a lot about these subjects, and it is reasonable that he should wish to address the House on them. But the way he has treated this debate has verged on the farcical because he did not speak to the motion put forward by the hon. Member for Bolsover. The personal attack launched by the hon. Gentleman was regrettable.
I do not propose to take up the points made by the hon. Member for Kingston upon Hull, East for I am not an expert on the subject which he discussed. I wish to deal with the issue of social costs which he raised and which is relevant to this motion. We recognise that economic actions have social consequences, but it is possible to take economic actions for social reasons in a way which will have long-term damaging results economically and socially. If we adopt a policy which involves the subsidising and propping up of industry regardless of economic efficiency, there will be short-term benefits in terms of keeping people in jobs—which is desirable in itself—but in the long term this will weaken British industry as a whole and our chance to compete in the world. That is the essence of the argument.
I turn to the speech made by the hon. Member for Bolsover who now, alas, seems to have deserted us. It was an impressive spee:h. The hon. Gentleman held the attention of the House for about one and a quarter hours and put forward his views with his usual verve, though perhaps with slightly more moderation than we sometimes expect from him. I was intrigued by the revelation that he shared a flat with the hon. Member for Kingston upon Hull, East. I had happy visions of their breakfast time philosophy day after day. One feature which struck me about the speech of the hon. Member for Bolsover, and indeed about the earlier part of the speech by the hon. Member for Kingston

upon Hull, East, was that they seemed to be tinged with xenophobia. I imagined the sort of conversation they would have when discussing world events over the breakfast table. I can imagine that as one hon. Gentleman passed the shredded wheat to the other, he would be told: "That wheat comes from America so we cannot have that. It was not grown in Great Britain." One sees a happy vision of breakfast time in that household.

Mr. Jeffrey Archer: Will my hon. Friend also agree that, after this debate, the one thing of which we can be convinced is that the two hon. Gentlemen did not agree on which line they would both take in the House of Commons today?

Mr. Raison: That is all too evident. We all know that the hon. Member for Bolsover is an individual and that the county of Derbyshire breeds individualists. Indeed, it breeds dukely individualists. The noble Lord, the Duke of Devonshire, is not afraid to speak his mind and to back his words by actions. The hon. Member for Bolsover is very much the same. There are moments when I think of him as the Duke of Bolsover.
Some years ago I visited Bolsover and looked over the castle. It is a sad, beautiful, remote, other-worldly place and has a romantic aura which is totally opposite to that conveyed by the hon. Member for Bolsover. The one thing that it has in common with the hon. Gentleman is that it is a piece of the past. The hon. Gentleman's speech evoked times past.
I was interested to hear that he had repudiated Marxism, or at least that he takes a pragmatic view of it. He comes from the mainstream tradition of British Socialism rather than taking in any of these new-fangled foreign Marxist ideas. That is consistent with his general attitude. We cannot attack him on classical ideological grounds. I am sorry he is not present because I was about to ask him and some of his hon. Friends how they reconcile the notion of free collective bargaining with the Socialist society.
The hon. Member for Bolsover said that he wanted to see 50 per cent. workers' control and half the boards of companies composed of workers. This is an ambition, but what happens when


that stage is reached and when half the board of a company is composed of workers' representatives? When the workers come along to see the board— and I am sympathetic to the principle of collective bargaining—what will happen in pay negotiations with the company? Presumably the workers' representatives will not take the part of the trade unions which have come to discuss the amount of pay for the next year but will sit on the management side of the table. In whose interests will they vote? Will they vote in the interests of their fellow workers or in the interests of some notion of the public good? Although we do not expect to be given a complete intellectual, ideological answer from the Opposition on that count, we are entitled to ask for some sort of clarification. I hope that other Labour Members will be able to assist the House on this point because it is important and relevant to the motion.

Mr. Bidwell: In that event would it produce a different set of circumstances from the present situation? If such a change were to happen on the board of a company, it would not become a crude question of there being two sides. The situation would change, though not necessarily in a wholesale way since remnants of the old system would remain. But it would not be a question of two sides sitting at the table, and that is exactly what Socialism is about.

Mr. Raison: I appreciate the point made by the hon. Member for Southall (Mr. Bidwell) as a long-term objective in what sounds like a one-party State or system, but if he had heard the speech of the hon. Member for Bolsover—

Mr. Bidwell: I did hear his speech.

Mr. Raison: In that case I withdraw what I said. The impression given by the hon. Member for Bolsover was that he saw before us vigorous, collective bargaining under the new system that he seeks to bring about, but there was no hint of this in the motion. The hon. Gentleman did not give the impression that the two sides of industry would merge into one single corporate body. Therefore, I hope that we can devise some means of finding out what was meant.
I wish to take up some of the points made in the speech of the hon. Member for Bolsover. I shall not spend time going over the record of the Labour Government and the fact that they did not do all that the hon. Member for Bolsover and the hon. Member for Pad-dington, North (Mr. Latham) were pressing them and bullying them to do in time past. Nor shall I point out what the public is coming to recognise— namely, that the economic achievements of the Labour Government in terms of increasing prosperity across the board were dismal in comparison with the achievements of the Conservative Government. It has now been established beyond doubt that the rate of increase in real incomes has risen by about four times compared with the figure under a Socialist Government.

Mr. Robert Sheldon: What about inflation?

Mr. Raison: In real terms the point has been established beyond doubt, and nobody has been able to challenge the point.

Mr. Sheldon: Perhaps the hon. Gentleman did not understand what I said. I was attempting to remind him of the achievements of this Government in dealing with inflation.

Mr. Raison: Undoubtedly there has been a higher rate of inflation. But my point is that, in spite of it, real incomes have gone up about four times as fast under the present Government as they did under the Labour Government, that at the lower end of the scale they have gone up substantially faster, and that they have gone up right across the board. Rich people have been getting richer faster than they did under the Socialists, but everyone is getting richer faster than under the Socialists.
The Socialists want above all to see equality. They say, "To hell with growth, prosperity and an improved standard of living." We take the view that we accept that there will be differentials. The result is that everyone is getting better off. These facts are now beginning to penetrate through to the country and there is no need to labour them except to point out that within this argument is to be contained a very


large part of the reputation of the point of view put forward by the hon. Member for Bolsover.
I want now to go through the hon. Gentleman's programme, not picking out every single point but trying genuinely to pick out the majority of his proposals. The first one had to do with death duties. I thought that my hon. Friend the Member for Louth (Mr. Jeffrey Archer) made a very good point when he spoke about their effect on agricultural land. I share his view that because of the soaring price of land death duties at present are having an extremely damaging effect on the agricultural community as a whole. The proposals of the hon. Member for Bolsover would make the situation worse still. For that reason I reject the hon. Gentleman's approach. I suppose that the long-term consequence on agriculture of the hon. Gentleman's approach is that we should end up with collective farms of some sort. All that one needs to say about that is that collective farms have been tried and have been found wanting by every standard. I hope that we shall not adopt the hon. Gentleman's thinking in that direction.

Mr. Bidwell: That is not entirely correct, either. The idea of collectivism as it is applied to agriculture has varied considerably from one country to another. Does the hon. Gentleman suggest that the ideas practised in agriculture in Israel have been a failure?

Mr. Raison: Certainly the kibbutz has not been a failure. It has shown a certain durability. However the Israeli approach seems now to be to turn away from the kibbutz or true collective and to move towards forms of co-operative farming or private ownership which are very different. I do not think that it can be argued that the Israeli experience supports the principle or the desirability of the collective farm.

Sir Stephen McAdden: In Israel collective farming is not confined to the kibbutz. The Israelis have the moshav and moshav shutafi which are moving towards private enterprise forms of farming.

Mr. Raison: My hon. Friend has made with greater precision the very

point that I was trying to convey. The Israelis have moved away from the pure milk of collectivism, which has not proved an altogether effective system.
Naturally enough the hon. Member for Bolsover referred to the surtax relief in this year's Budget. Understandably he put forward a programme to sting the rich. He did not use the famous £300 million to finance quite as many operations as the Socialist Party normally does. Unfortunately I have not kept a record of all the projects, schemes, improvements, benefits, and ingredients of national prosperity which are to be wrung out of the £300 million. I am reminded of the saying, "How long is a piece of string?" How long is the £300 million when it gets into the hands of people thinking of how to spend it? This notion of stinging the rich in order to secure an increase in wealth across the board has been found to be a false one.
The hon. Member for Bolsover then argued that capital gains tax should be increased spectacularly. There is one point about that which is overlooked by those who wish to see the tax put up to a much higher level. It is that they do not take account of inflation. Capital gains tax is paid on money which has lost a great deal of its value because of inflation. If capital gains tax is put up very much higher than it is at present, people will be deterred from investing Capital gains will cease to have any meaning. I hardly believe that that can do much good. It is also pertinent to point out that there is no provision for setting capital losses against capital gains. I do not believe the principle of capital gains tax to be a bad one. However, if it were treated in the way that the hon. Gentleman proposes it would become completely farcical.
The hon. Gentleman next dealt with defence cuts, that well known standby of some members of the Labour Party, though not of the right hon. Member for Workington (Mr. Peart) who has the misfortune to lead the Opposition in defence debates and who is made to try to make us believe that there should be defence cuts. However, the hon. Member for Bolsover, like his hon. Friend the Member for Salford, East (Mr. Frank Allaun), believes that some savings could be made.
What is most conspicuous about the Socialist approach is the absence of any serious attempt to itemise where those cuts should fall and what the consequences should be. A very large proportion of the defence budget goes in pay. Does the hon. Member for Bolsovef propose that there should be some severe restriction on the payment of those who work for the Armed Services? I assume not, though I imagine he would not mind the pay of field marshals being chopped down a bit. Does the hon. Gentleman see any savings in equipment? If he does, he should tell us what should be cut and what the consequences of any cuts would be for some of our industries. One substantial increase in the defence budget has been the decision to accelerate the naval shipbuilding programme. Unfortunately, the hon. Member for Kingston upon Hull, East has left the Chamber and cannot tell us whether he would welcome a reduction in the shipbuilding programme as a result of his hon. Friend's proposals. What would be the impact on Tyneside if the naval shipbuilding programme were curtailed severely? Does the hon. Member for Bolsover want to see that?
Then came overseas investment, another well-known enemy of the hon. Gentleman and others who think like him. Again, has he thought of the consequences? What would happen if we ceased to invest in the under-developed or developing countries? Would it help them to withdraw our support when it is given in that form? The hon. Gentleman may take the view that cash aid is better than investment aid. If he does, he is completely wrong. The record shows that cash aid has the unhappy habit of disappearing in all sorts of unintended directions. The essential feature of investment aid is that it is put to the purpose for which it is intended.
When poorer countries cry out for investment, does the hon. Gentleman adopt the approach which we used to think was associated with the Socialist Party, namely, that it is essential to make some kind of attempt to help poorer nations, or does he believe that we ought to be talking about withdrawing investment aid?
It see that the hon. Member for Bolsover has now returned to the

Chamber. I apologise to him for having had perforce to talk about his interesting speech in his absence—

Mr. Skinner: I heard in the Tea Room that the hon. Gentleman had been complaining about my absence. I have been having some bread and cheese and a cup of tea. However, I hope very much that he will not use my reappearance as an excuse to repeat his remarks.

Mr. Raison: I was not complaining about the hon. Gentleman's absence. Even Socialists must live. I was regretting his absence—

Mr. Jeffrey Archer: Does the hon. Member for Bolsover (Mr. Skinner) realise that I missed my bread and cheese in order to hear his speech?

Mr. Raison: Even those who are rich beyond the dreams of avarice are prepared to suffer for the common good. I commend my hon. Friend for his devotion and public-spiritedness.
I am going through the hon. Gentleman's multi-pointed programme. Obviously he has been influenced by his right hon. Friend the Leader of the Opposition into the belief that if he can produce 27 points, or whatever it may be, in one speech he has made a very good speech. Of course, the hon. Gentleman's speech was better than the 25-point speech of his right hon. Friend. I give him that credit.
We have now reached the point about import controls which the hon. Gentleman advocated—for example, on motor cars. He said that it is ridiculous that so many motor cars sold in this country should be coming from abroad. Is it ridiculous? In one sense it is. It is a ridiculous commentary on the efficiency of our motor industry, or parts of it, that we cannot sell a higher proportion of our cars and that we should be losing our market to foreign motor car companies. Is the right answer to impose import controls to keep others out? The consequence is to encourage inefficiency. Is that what the hon. Gentleman wants? Must we say that we cannot produce the cars because our design is bad, because industrial relations in the motor industry are bad, or for whatever reason it may be, and that all we can do is to take refuge in this defensive seventeenth century mercantilist approach of keeping the other


lot out? I cannot believe there is anything to be said for such a feeble and defensive view.
The hon. Gentleman then spoke about rents. I was astounded by his moderation. It was a surprise to me that he wanted only £250 million new rent subsidy. I have not had time to work out the sums. If we deduct from the £250 million that the hon. Gentleman is prepared to allow the amount permitted under the Housing Finance Act in the form of rent allowances and rebates, the benefit to those who have rented property will be almost imperceptible.

Mr. Skinner: I am not suggesting that the £250 million subsidy to local authority housing revenue accounts is the only amount of money. The hon. Gentleman fails to appreciate that we are talking about an annual budget. Therefore, an increase of £250 million must be on top of that which already exists. The point is that, notwithstanding that the subsidy last year was only £160 million to £200 million, depending whether the local authority rate subsidy was accounted for or not, the £250 million is in addition because that is on the deficit side of the budget.

Mr. Raison: I do not think that I misunderstood the hon. Gentleman, although it is possible. I thought that he was suggesting that we should spend, on top of the present Budget plans, an extra £250 million. I was arguing that the sums which he would withdraw under his programme would reduce that total amount.
I turn now to the hon. Gentleman's argument in favour of municipalisation and of council ownership of, I think, all rented properties.

Mr. Skinner: Privately-rented properties.

Mr. Raison: The taking over of privately rented properties. We heard this argument at different times in Committee on the Housing Finance Bill last year. One ingredient in the argument, which the Opposition never effectively countered, is the inherent tendency of local authority owned housing towards a kind of paternalism in its administration and that if it is all within the public sector it will for ever be the plaything of politicians of all shades of opinion and

description. The more we take housing into public ownership, the more this paternalistic element will increase and the further we shall get away from the kind of society I want in which people are independent rather than dependent. That lies at the heart of the difference in attitudes between the two sides on this admittedly important issue.
The next section of the hon. Gentleman's speech concerned personal incomes. He said that he would scrap VAT and introduce higher purchase tax for luxury items. I concede that VAT has its drawbacks, but it has its merits, too. There is something old-fashioned about this notion of going for luxury items. The hon. Gentleman did not define what he meant by luxury items. What we have known as luxury items in the post-war years are happily and desirably moving out of the luxury category and becoming more widely available. I agree that mink coats remain luxuries. If that is the kind of luxury the hon. Gentleman has in mind, he has a good point. But it is unrealistic to think that the relative handful of possessions which are completely and utterly luxuries will produce any significant revenue in terms of taxation. We cannot hope to switch to a heavier tax on luxuries in the process of scrapping VAT, and so on, without a substantial loss of revenue.
I am sure we would all like to see an increase in pensions. My hon. Friend the Member for Louth talked about this point in a most sensible manner. The figures which are often talked about are figures which we would all like to see come in before too long. I simply make the point that we, as a Government, have moved more rapidly in that direction than the Labour Government. Our annual review provides an important ingredient in the pension structure.
I share the view expressed by my hon. Friend the Member for Louth about family allowances. In my speech in the Budget debate I said that there was a good case for putting up family allowances and perhaps retaining the tax on sweets, and so on. I agree to some extent with the hon. Member for Bolsover there.
The hon. Gentleman's proposals on fiscal drag would have the effect of eliminating it altogether. The tenor of


his argument would seem to be anti-growth. This has become the characteristic of the Labour Party in the last few months. The Opposition no longer believe in growth. They have placed equality above everything else and do not care about growth.
There are voices in the Labour Party which still believe in growth. The right hon. Members for Grimsby (Mr. Crosland) and Birmingham, Stechford (Mr. Roy Jenkins) make this plea. But the new thinkers in the Labour Party—for instance, the hon. Member for Bolsover and the right hon. Member for Bristol, South-East (Mr. Benn)—regard growth as a bad thing to be shed pretty well at all costs.

Mr. Donald Stewart: Will the hon. Gentleman give way?

Mr. Raison: I welcome someone from another party into the debate.

Mr. Donald Stewart: Does the hon. Gentleman agree that the Labour Party is gradually learning to abandon the ludicrous will-o'-the-wisp chase after increasing the gross national product as an end in itself, that people are beginning to realise that there can be a more sensible approach, and that there must be some end to the multiplicity of material wants?

Mr. Raison: I do not share the hon. Gentleman's view. We are right to go for growth. When we talk about material wants we can get a false picture of what is happening. If we have a greater gross national product we can spend it on most crude forms of materialism. We can spend the whole lot on bubble gum or candy floss, or whatever it is that Socialists talk about, or we can spend it on better schools, houses, and so on. We can spend it on a better environment. There does not seem to be any serious argument for trying to limit growth on environmental or moral grounds. I disagree with the hon. Gentleman on this point.
The hon. Member for Bolsover wants to introduce subsidies on all basic foods. The inevitable long-term consequence will almost certainly be some form of rationing. If food is provided at an artificially cheap low rate we shall build up high pressure for it, and experience over the years has shown that some form of rationing is the result.
It is reasonable and proper to ask how we should attempt to meet the increase in food prices, which has been the most striking feature of inflation. I acknowledge that. However, 1 believe that the Chancellor was right to take the view that the way to meet this kind of problem, so far as it exists, is by increasing incomes rather than by specific subsidies. There have been some fairly substantial increases in incomes. There have been particular increases in incomes through the social security system.

Mr. Latham: I have listened with interest to the hon. Gentleman's argument against subsidies. It is one with which I am familiar, but I am surprised and intrigued that he should take food as an example. He said that by having artificially low prices for food we would build up demand and consequently there would have to be some form of rationing. Does the hon. Gentleman think that we are a nation with a natural inclination towards obesity, that we should all over-eat? Does he not accept that there are natural limits to human demands and that the concern of Socialists is to meet those demands?

Mr. Raison: There is an inherent tendency amongst us to over-eat. I do not think that the interminable articles about dieting which one sees in most of the Press could be written unless there was. My point is that if we want to meet a cost increase which is due primarily to world factors, it is better to try to do so through income increases rather than by providing subsidies.
Then the hon. Member for Bolsover took over the banks and pretty well the whole of the City of London. He regards this as what used to be called the commanding heights of the economy, and something on which he most wants to get his hands. I know that we shall never agree about this, however long we debate the subject. Even if I were to speak for twice as long as he did, I do not flatter myself that I could begin to persuade him that he is wrong. The notion that this delicate, flexible and mostly efficient series of enterprises in the City of London could operate with anything remotely resembling the standard of skill and international competitiveness with which it now works if it were taken over by a bureaucracy is complete and utter gobbledygook. The


areas in which one needs freedom of operation and freedom from red tape, where one has to operate with speed in this linked series of businesses are the very areas in which Socialism would be most liable to cause damage to the national interest.
So far I have spoken about the hon. Gentleman's general policy proposals, and I now propose to say something about his references to the machinery of Government. I think that here Mr. Hyde gave way largely to Dr. Jekyll. because what the hon. Gentleman said about the machinery of government contained a great deal of good sense and was well worth saying. I do not entirely agree or disagree with the hon. Gentleman, but what he said in this context had little or nothing to do with Socialism. He was putting forward proposals which could just as well be put forward by Conservatives as by Socialists, and we have left the realm of party thought, ideology, and so on.
I see the case made by the hon. Gentleman for scrapping the annual Budget, but a formal stocktaking, if one likes to call it that, has a lot to be said for it. If there were not an annual Budget, the Government would get up to more tricks than they do now. Annual Budgets force the Government to say what their policies are. They force the Government, once a year, to say what their strategies are. They force the Government to go over the whole ground. The annual Budget makes it inevitable that there is a formal policy debate at least once a year. This year the Budget debate was coupled with the previous debate about public expenditure, and I think that those two subjects together form an integral part of the parliamentary programme. That is a good thing. What is more, if there were not the annual Budget ritual we should miss the sight of my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) in his top hat, as well as various bits of flummery. We should lose an important part of our right to know what the Government are up to and what they are thinking about.
The hon. Gentleman referred next to political civil servants, and again I see half a point. Under the present Administration, as under others, one or two

politically-minded people have been brought into the Civil Service in a particular role, and I do not think that that is a bad thing. We, as politicians, are entitled to say that we cannot forget about politics. They are part of the whole set-up. But it would be a mistake to take it further and try to go over to the American system of "spoils", because once we went beyond that first step we would get to the point at which the plum jobs in the Civil Service would go to our supporters. I cannot see that the American Civil Service benefits or stands up to ours as a result of their system. What is more, the effect on the career of civil servants would be damaging. If they got the feeling that all the top jobs would go to people from Central Office or Transport House we should not have the high standard of public administration that we enjoy now.

Mr. R. C. Mitchell: Would not the hon. Gentleman agree that even now there must be hidden Marxists in the Treasury? I ask that, because the Price and Pay Code could have been written only by a convinced Marxist.

Mr. Raison: I do not altogether disagree with the hon. Gentleman. He may have something of a point there.
The hon. Member for Bolsover then went on to talk about Standing Committees. We sat through long hours on the Housing Finance Bill last year, and I think I must agree with the hon. Gentleman that if a timetable had been agreed at the start the debates could have been a little more consistently meaningful. We might have missed the three-and-a-quarter hour diatribe of the hon. Member for Paddington, North on goodness knows what, and that would have been entirely beneficial to us, but we would also have missed the entertaining speech of the hon. Member for Bolsover about one Sir Herbert, and I should have regretted that.
But the hon. Gentleman has a point. Where it is clear that a Bill will go on for a long time, and contains many controversial political points, there is a lot to be said for timetabling it from the start if Parliament is to do its job properly and scrutinise the measure. The fact that amendments are made in the other place is not necessarily bad, because it shows that although the Government do not respond immediately, they


are prepared, in the longer term, to take up the points that are made. The other place can be a useful mechanism for that purpose.
I think that the hon. Gentleman also has a point about the register of interests. It seems to me that there is a good case to be made for requiring Members to say in whose pay they are. I should leave it at that. I should merely want Members to say who employs them in some form or other.
I think that this debate has, in a way, been worth while. Certainly I enjoyed the hon. Gentleman's contribution. My hon. Friend the Member for Louth and I have tried—as I hope the Minister of State will later—intermittently anyway, to show the flaws in the hon. Gentleman's argument in the relatively mild Socialist programme which he put forward, and I rest happy and confident that whatever happens we shall never see the programme implemented.

1.59 p.m.

Mr. Arthur Latham: I note that although the hon. Member for Aylesbury (Mr. Raison) did not listen to my speech in the Committee considering the Housing Finance Bill he did listen to my hon. Friend the Member for Bolsover (Mr. Skinner). I fear that the hon. Gentleman has benefited little more from listening to one than from not listening to the other, because most of the points with which he claims to deal he seems to have understood at only a superficial level, if at all.
Before going on to the wider implications of the motion I make particular reference to the short exchange that took place earlier, on the subject of pensions, because although the hon. Member for Aylesbury and the hon. Member for Louth (Mr. Jeffrey Archer) may choose to believe that pensioners are so much better off, that is not the impression, understanding and knowledge of the pensioners themselves.
I very much regret this reference to comparisons between a period of Labour Government and the more recent period of Tory Government. What my hon. Friend is much more concerned with is the fundamental right and role of pensioners in our society. I would think that the figures of £10 and £16 to which he referred—he said that they might have to be adjusted—have almost been over-
 

taken by events already. What we should be aiming for is that pensioners, at least as a beginning, should be paid a substantial percentage of the average industrial wage.
My hon. Friend, along with many others of us, believes that people on retirement from full-time gainful employment should not have to adjust to a substantial drop in their standard of living, but should at least be able to maintain that standard and—many of us would argue—be given an opportunity to improve that standard in their retirement years.
Similarly, the fiction—I cannot believe that it is anything else—about workers being so much better off as a result of this Government is not borne out by what is said by my constituents, and there seems little evidence that this is the view of people who have real knowledge from their own experience. Apart from inflation, there are three main headings to which they refer—rents, fares and food. I could not accept the argument that there has been any improvement in even their relative positions.
I want to refer to two parts of my hon. Friend's motion. I congratulate him on raising this subject, and on his excellent speech. I am not sure whether some hon. Members opposite are being flippant in describing my hon. Friend's proposals as modest and cautious, but I believe that they are, and that in some respects they may even be inadequate.
My hon. Friend has carefully referred to the need to "change, not re-arrange" society and to the creation of one nation. The motion is primarily about class. Sociologists have broken down our community into so many different classes that it becomes confusing. There is talk of the lower working class, the middle working class, the upper working class, the lower middle class, the middle middle class, and the upper middle class. By the time that one has finished, there is complete confusion of people's roles in society.
There are those who think in terms of simple social classes related to educational background, accent or family connections. There is another division simply between management and workers; in the use of that understanding of class, owners often seem to be left out of consideration. The two classes that I want to talk about are simply


defined as those who live by what they earn and those who live by what they own.
Recently—because of the difficulty of obtaining HANSARD, I have not been able to check the exact words and reference— the present Chancellor, quoting a Labour predecessor, tried to make nonsense of the idea of redistribution of wealth by making the point simply in the context of incomes and telling the House that, if all those earning over £5,000 were taxed and that money redistributed among others, most workers would be only a couple of pounds a week better off. This was the kind of example given by both the present Chancellor and his predecessor.
Distribution of wealth measured by income is a false measure of the basic inequalities of our society. Even if one compares incomes, one finds that 10 per cent. of the population, collectively, take nearly 30 per cent. of total incomes, and that at the bottom end of the scale 30 per cent. of the population take less than 10 per cent. of the incomes which are distributed. That in itself is a basic inequality.
But the far grosser inequality, and the one which is fundamental to the idea of changing, not rearranging, our structure of society, is that which relates to the distribution of real wealth. This is not to be measured in terms of income. I take as my definition that which is used in Social Trends, in which real wealth is taken to include company shares and debentures, security mortgages, building society shares and deposits, life assurance policies, cash at the bank, household goods, pictures, china, and so on, and land and buildings. Social Trends No. 3 of 1972 calculates gross personal wealth at £108,000 million. Of that sum, £18,000 million is held in company shares and debentures and £33,000 million in land and buildings. These are the things which I believe constitute real wealth.
I have been doing my best to find some up-to-date, authentic and authoritative figures as to the real distribution of wealth. Different methodologies are used, different statistics are used at different times, but the book "Wealth in Britain" by Atkinson has a very interesting commentary on my hon. Friend's desire to achieve a change rather than a rearrange-

ment. It puts in a very different perspective the kind of speech that we had from the hon. Member for Aylesbury, who wants simply to make partisan points of comparison between the 1964–70 period and what has happened since.
The book that I have mentioned shows that, basically, the real imbalance in our society—in which a small minority owns the vast majority of wealth and the majority of people own only a small proportion of total wealth— has altered very little over the last 60 or 70 years. In the period 1911–13, 5 per cent. of the population owned 87 per cent. of total wealth. By 1954 that figure had fallen to 71 per cent., by 1960 it had risen again to 75 per cent. and in the 1970s there are figures, possibly of slightly less authoritative origin, but which may be more accurate, showing that 7 per cent. of the population own 84 per cent. of the real wealth.
On perhaps a more favourable comparison, certainly on the most recent statistics available from authentic sources in 1970, it appears that 25 per cent. of the population own 72·5 per cent. of the total wealth. I am talking of real wealth and not simply of incomes, which, as I have said, do not give a proper indication of the basic social inequalities. If 25 per cent. own 72·5 per cent. of the wealth, the remaining 75 per cent. of the population can have between them only just over a quarter of the total wealth available. Those who talk of democracy either have a very limited concept of democracy or are being hypocritical if they assert that there can be a democratic form of society in a situation of such imbalance in the distribution of wealth.

Mr. Sheldon: My hon. Friend appears to be finishing his main argument arising from the facts of the situation, and drawing his conclusions. He is grossly underestimating the position. I invite him to consider the element of land, for example. In England and Wales, land with vacant possession is estimated at an average price of £191 per acre. That is grossly less than the current prices being charged. These are the foundations of the statistics that my hon. Friend is quoting.

Mr. Latham: I am grateful to my hon. Friend for his intervention. I was speaking from the latest available statistics and was understating rather than overstating


the position. But if the position were no worse than as 1 have described it it would still represent a gross imbalance and inequality in our society. It makes nonsense of incomes policies and other policies which are described as "fair". I do not comprehend how one can assert that they are fair against the broad canvass of the basically unfair society in which these policies are applied.
One has some understanding of what is meant by political democracy. One may have a lesser understanding generally of what is meant by social democracy. Some people are learning fast about industrial democracy and are thinking more and more intelligently and understandingly in terms of workers' control. But none of these three facets of democracy can have true meaning without the establishment of a greater element of economic democracy.
The motion refers to creating "one nation". I am seeking to establish the other side of the coin—that we are not half a dozen nations but two nations, in that there are those who live by what they earn and those who live by what they own, and that the disparity in the distribution of wealth is as great as I have indicated.
I take three illustrations from industry, private residential accommodation and land. The industrial example is that of GEC Limited. It is one of the 180 or 200 key firms which run the economy and own most of the wealth of the country used for production. It is the eighth largest world electrical corporation and the third largest in Europe—only Philips and Siemens being greater—and the fifth largest company in the United Kingdom. Apparently it is our largest private employer, with 181,000 employees compared with 245,000 in 1967. It is an interesting commentary that between 1967 and 1972 our largest private employer has reduced its payroll by 64,000 as a consequence of policies described as "rationalisation".
At the same time as 64,000 jobs have been shed—which means 64,000 people being made redundant—the company's profits have increased from £36½ million in 1967 to £77 million in March 1972. Its current assets are stated to be valued at £549 million. In 1969, its profit represented £213 a year per employee, and by 1972 that figure had risen to £424. In

1972, the gross average wage per employee was no higher than £27 a week—and that average included the salaries paid at management and top executive level. Thus, the remuneration of the lower-paid employees was well below £27.
I am making no attack on the company as such; I am merely using it as an example. But we must make the comparison between the lot of its employees and the position of the directors. I understand that the directors number 16, and between them own 22 million GEC shares, worth £37 million. I quote the holdings of the directors because when we talk about public ownership as against private commercial exploitation we so often get interventions of the kind that we had earlier from the hon. Member for Cities of London and Westminster (Mr. Tugendhat), who spoke about pension funds and invited my hon. Friend the Member for Bolsover to be a party to some scare that the Socialists would take over pension funds and that those who planned to benefit from them would not do so after all.
In addition, there is the argument that in this sophisticated, complex capitalist system of today the old arguments are out of date because nowadays one company has holdings in another, trade unions hold shares, and the little widow in Bournemouth would not get adequate compensation in a public takeover. But when one looks at these companies and at the holdings of individual directors one realises that it is nonsense, in this sophisticated, complex, modern-day capitalism, to argue that there are no longer two nations.
I will not burden the House by going through all the 16 directors of GEC in my example. We start with Lord Nelson of Stafford, who holds 56,991 ordinary shares; Lord Aldington holds a mere 29,218 ordinary shares; Mr. K. R. Bond, of Gerrards Cross, Buckinghamshire— that well-known working-class area— holds 16,155,242 ordinary shares; Mr. I. D. Lewis, of Hampstead, holds 17,507,434. Lord Poole—I have heard his name in other circles in the past— is also a director. In the document provided by Counter-Information Services Sir Arnold Weinstock is said to be worth about £5 million, and Messrs. Lewis and Bond hold 15,600,000 shares jointly.
On top of this, in a company where the average wage of the employees, even taking management incomes into account, is £27, Lord Nelson of Stafford, in addition to his benefit from shareholding, was paid £40,000 in 1972; one director was paid between £32,500 and £35,000; three were paid between £20,000 and £30,000; and four were paid between £10,000 and £17,500. Yet it would be argued by many Government Members that we are really one nation and that the divisions in our society have disappeared during the last half century. I argue that these divisions are as great as ever, and that it is unreasonable to expect ordinary working people to accept the restraints and constraints of this Government and other Governments while these basic inequities exist and while there are such extremely unfair comparisons between the minority who have such great access to the wealth produced and the vast majority who have only a very limited access to it.
It is also true that General Electric is one of the companies which has not done badly out of the Vietnam war. One source of its profits has been the supply of equipment for aircraft which, amongst other things, have been concerned with the napalm bombing of the Vietnam countryside. There is not just an economic objection but a political objection to the functioning of that company.
I shall quote at less length the activities of another group of companies which has had some effect in my constituency. I expect that the hon. Member for Aylesbury will have his share of bread and cheese—no doubt a much larger share than my hon. Friend the Member for Bolsover. The group of companies to which I refer has been involved in property deals in the London area. The group consists of Metropolitan Estates and Property Corporation, the Stern family holdings, Star (Great Britain), Authority Investments, the infamous Freshwater Group—in which Mr. Osiah Freshwater is prominent—and Swallow Securities, in which a Mr. Stern and a Mr. Matthews are involved. Mr. Stern has family and other past connections with Mr. Osiah Freshwater. Also involved are Regalian Properties and Minster Assets. The Mr. Matthews to whom I have referred, along with Vis-

count De L'Isle, is concerned in the First National Finance Corporation.
These companies have all been involved directly and indirectly in a process by which the First National Finance Corporation acquired 115 blocks of London flats—some of them are in Paddington— affecting between 9,000 and 10,000 tenants. Having acquired the blocks over a relatively short time, and having spent about £100,000—if it were £200,000 or even £300,000 it would still be a bagatelle compared with the money eventually involved—on repairs and improvements to the properties, and having acquired them for some £52 million, it was able to sell them to 22 new sets of landlords for £76 million, thus making a profit of £24 million.
If some Government hon. Members were present no doubt they would say, "What is wrong with people making a profit from property deals." However, it is relevant to the people living in my constituency, and to the tenants of flats throughout London, that the net profit made by FNFC is £2,333 per tenancy. None of the 22 purchasers from FNFC is a philanthropic organisation. Each of them believes that it will be able to recover, by increased rents, the sum that it has expended. Already there have been successful registrations representing increases of £200 a year and more. The £24 million profit which FNFC has made from this deal will within a relatively short time come directly from the tenants of the 115 blocks.
That has happened very much as a consequence of the Housing Finance Act. As local authority rents are forced up, so private rents are forced up still further. Each sector works viciously against the other. Whether people are private tenants or tenants of local authorities they are very much the financial losers as a consequence of these transactions.
I am sorry that no Government backbench hon. Members are present who could intervene to offer some justification for the activities of such companies as FNFC, or others connected with and associated with the transactions which I have described. Their activities indicate clearly that there is something fundamentally wrong with a society which allows exploitation of that kind to continue.
It is claimed by the present Government, and not always by those within the Government, that we are much less of a two-nation society. Bearing in mind that claim, the sale of some land by Viscount Wimborne, who is aged 32, is likely to bring him a profit to the tune of £26 million because of the granting of planning permission to develop what is now farm and heathland. It was reported last month that about 575 acres of the Canford Estate, near Poole, Dorset are involved. Even the sale of 575 acres will leave the majority of the estate untouched. That is the result of a planning decision to which the community has contributed.
He having made his £26 million, most of Viscount Wimborne's estate remains untouched, yet we are told that we are much less two nations than before. It is not cloth-cap propaganda to suggest that there are two classes in our society. There are those who belong to the class which has indulged in the three examples which I have given. The sort of measures that my hon. Friend the Member for Bolsover has proposed would represent mild changes compared with the radical and fundamental change that must be made if we are to move towards a fair society.
The rearrangement that has taken place under Labour Governments as well as Conservative Governments seems to have been concerned much more with a redistribution between the 95 per cent. of the population who, between them, own very little. The basic situation that exists between the 5 per cent. who own most and the 95 per cent. who own little has changed only slightly, despite some 70 years having passed, during which there have been six different Labour Governments.
There has been some redistribution among the 5 per cent. who own the majority of wealth. It is now less concentrated in the hands of the 1 per cent. than before, but it has not involved the majority of people who own very little. It is one of my great regrets that so often the arguments between the parties in this House and outside seem to be about economic management rather than about a fundamental restructuring of society.
I welcome the motion introduced by my hon. Friend the Member for Bolsover because it sets the background for examining any kind of incomes policy and examining the departure from collective bargaining whilst the system remains fundamentally as it is. It gives us the opportunity to urge that instead of there being some juggling of wealth amongst those who are largely dispossessed in our society, a future Labour Government should take radical measures to redistribute the wealth from the 5 per cent. who live by what they own to the 95 per cent. who live by what they earn. I hope that one day we shall see the terms of the motion fulfilled and that we shall have a logical redistribution of wealth in society.

2.29 p.m.

The Minister of State, Treasury (Mr. John Nott): I hope that the House will permit me to intervene at this stage. I do so with more than the usual degree of interest because it was on a similar motion of 6th March 1970 just before the last General Election, that I made my maiden Front Bench speech from the Opposition benches. On that occasion, after six years of Socialist administration, the hon. Member for Salford, West (Mr. Orme) proposed "The case for a Socialist Budget". That was the title of the motion.
Nothing much has changed since then, except that some hon. Members opposite, in particular the hon. Member for Bolsover (Mr. Skinner), now advocate a Socialist programme during a period of Conservative Government, having in their lights failed to achieve one from their own right hon. Friends. Hon. Members must therefore not be unduly surprised if their pleas, in particular the plea of the hon. Member for Bolsover, evoke as little sympathy from me and from these benches as they did from their own creature, the then Labour Government who afflicted us between 1964 and 1970.
I remember that earlier debate very well, for defending the then Labour Government against the criticism of his own supporters was none other than the ubiquitous hon. and learned Member for Lincoln (Mr. Taverne), who was then the Financial Secretary to the Treasury. I am sorry that the hon. and learned Member was not here again today to


explain to the hon. Member for Padding-ton, North (Mr. Latham) and for Bols-over why he is still the hon. and learned Member for Lincoln but here now with a substantially enhanced majority— because the hon. and learned Gentleman responded very well and showed very well what the electorate's reaction is to the programme which was advanced by the hon. Member for Bolsover when he opened the debate.
It would be indelicate of me to go over again that earlier debate, and I do not intend to do so. However, I will quote one prophetic sentence—I do not normally perform in the rôle of prophet—from that debate, when I said:
The Financial Secretary
—I was referring to the hon. and learned Member for Lincoln—
had an easier task than I, because he opened his speech by saying that he could not really say anything … 'Do not expect too much from the Chancellor' is the message. 'He'
—that is, the Labour Chancellor of the Exchequer—
'will do the right thing by the nation. He will be tough and ruthless, even if it loses the Government the election and every Socialist seat'."—[OFFICIAL REPORT, 6th March 1970; Vol. 797, c. 827.]
The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), who was then the Labour Chancellor, unfortunately was not successful in losing Bolsover to the Conservatives at the last election, but he made a pretty good job of the General Election as a whole, as some of his hon. Friends are not too slow to remind him.
This has been a most useful debate in informing the country about what we might expect from a Socialist programme. I am sure that my hon. Friends will wish the hon. Member for Bolsover continuing success in the ballot. We hope that every time that he seeks an opportunity for a debate in the House he will be successful. We might even extend an invitation to him to speak, at our expense, in all the marginal seats throughout the country.
Bolsoverism, if I can call it such, is a rather specialised and independent type of Socialism—not, I fancy, entirely to the liking of all Labour Members. Nevertheless, I for my part want to congratulate the hon. Gentleman on the manner in which he moved his motion. Many of my

hon. Friends have made very friendly remarks about the way in which the hon. Gentleman delivered his Budget speech. The hon. Gentleman showed that he possesses one exceptional, if not unique, parliamentary talent. This is the capacity to make arithmetic the most incoherent science yet known to man. This seems to me to by a rather useful parliamentary talent, because it puts hon. Members such as the hon. Member for Ashton-under-Lyne (Mr. Sheldon) and myself, who have to attempt to answer the debate, in a peculiarly difficult position.
Having described my difficulty in trying to follow the hon. Gentleman's sums, I should say that I do not believe that the task of answering him falls to me. I am not qualified to comment on what is essentially an internal debate within the Labour Party. As the hon. Gentleman said, he was also having a go at what he described as the media pundits. It was a combination, as the hon. Gentleman admitted, of an internal debate in the Labour Party and a go at the media pundits.
I would merely say about the hon. Gentleman's speech that we on our side will find it very hard put to it to produce a programme of our own which provides such an assured election winner for the Tory Party as the "Bolsover manifesto". We shall be reading it with interest in the coming months.
Nevertheless, I genuinely admire the hon. Gentleman's integrity in advancing his programme. He advanced it very forthrightly. I remind the hon. Gentleman that his right hon. Friend the Member for Lanark (Mrs. Hart) is reported to have said on 20th October 1971 that
Labour Members exercising their integrity could destroy the credibility of the whole Party.
I therefore fear that the Bolsover manifesto may be in that category to some hon. Members.
The hon. Gentleman said that the only Left-wing journals which fairly expressed his viewpoint were the Morning Star and Tribune. I thought that Tribune came rather as an afterthought. The Morning Star was the journal which drew the hon. Gentleman's admiration. He said that he had been reading the Financial Times for the past fortnight to prepare himself for this debate. I am sure that it was the influence of this journal which led him to


announce that his programme would involve only a few cautious steps on the road to Socialism.
I have to advise the hon. Gentleman that his proposals, so far as I have been able to calculate their cost in a few minutes sitting here, would involve a cost of over £100,000 million. I hope that HANSARD will get the figure right, because sometimes the decimal point gets moved a little either way. However, my rough calculation—I assure the hon. Gentleman that it has been worked out only on the back of an envelope by me—is that his programme would cost about £100,000 million—more than that, perhaps, but I cannot believe that it would be much less.
Given that this is the case, I can understand how he needs to nationalise the banks and the insurance companies so as, to use his own words, he can push their money around where he wants it. I do not know what the 20 million or so depositors in the banks—the ordinary people who put their earnings into the banks—and the policyholders of insurance companies would have to say about their hard-earned savings and the proceeds of their insurance policies being pushed around by the hon. Member for Bolsover. I suspect that they would not like it very much.
Nevertheless, having heard a number of the hon. Gentleman's speeches in the House—we have had some good fun at Question Time—I think that the mantle of responsibility to a large degree descended upon him for this debate. It was one of the best speeches that I have heard him make in the House.

Mr. Sheldon: I am not sure whether the hon. Gentleman has dealt with the costing of my hon. Friend's programme.

Mr. Nott: I intend to deal with the hon. Gentleman's costings at some length. I hope that the hon. Member for Ashton-under-Lyne will also deal with the costings of the programme of the hon. Member for Bolsover, because we want to hear from the hon. Member for Ashton-under-Lyne, who is the spokesman for the Labour Party on this occasion, a little about the Labour Party's official costings. There has been a certain coyness, an engaging reticence, about advancing any Labour policies. I look forward with anticipation to hearing

some of the hon. Gentleman's costings. I shall make my comments about the costings in a few moments.
"Labour's Programme for Britain" was published last July as a special issue of Labour Weekly, which the hon. Member for Bolsover does not like very much —rather, he likes it some weeks but not others. I have "Programme for Britain" here and I have read it with great care. It disturbs me a little because the only part of the United Kingdom which is left off the map on the front page are the Isles of Scilly which I have the honour to represent. "Programme for Britain" has a rather diffuse, disjointed and distended style. It might almost have been drafted by the Labour Party's own specialist policy adviser, the hon. Member for Bolsover himself. In fact, even Mr. Terry Pitt, who I understand is in the research department at Transport House, has said of the Labour "Programme for Britain"—he said it when he introduced his snap election mini-manifesto the other day—
Labour's Programme for Britain 1972 is both too wide and too lacking in detail to be anything more than a guide.
It is, as I understand it, only part of the so-called participation programme which is now what the Labour Party are advancing.
I want to get on to some of the detailed comments which were made by the hon. Member for Bolsover. Public ownership, naturally and expectedly, formed quite a large proportion of his speech. I can understand that some hon. Members opposite, in order to satisfy their doctrinal cravings wish to extend public ownership. But what is not clear to me or to the people of this country is why further nationalisation should bring about a Socialist millennium. If the people could be told why nationalisation should bring about this Socialist millennium, we would be fascinated to know the answer. There are signs available that the employees of the existing nationalised industries are any more or any less contented, happy, hard-working or committed to their bosses than their brothers in private industry are. I have seen no evidence.

Mr. Bidwell: Nor is there any evidence that the workers in the nationalised industries wish to go back to the system which existed before. They are somewhat disappointed with what they get, but they


want to go on to a more Socialistic form of society.

Mr. Nott: That may or may not be true. Equally I could reply that I doubt very much whether the employees in the banks or in insurance companies are waiting, full of anticipation and with longing, to be taken over by the Labour Party led by the hon. Member for Bols-over. I do not think they have any great craving to become publicly-owned industries. Certainly I am not aware of it.
The fact is that doctrinal Socialists such as the hon. Gentleman are very expensive pets. They have profligate habits. They seek to buy their political pleasures out of other people's earnings and not from their own. According to the Labour "Programme for Britain" for 1972, the document to which I was referring—I know that the programme for 1973 is in the process of being prepared—
Public ownership to everyone except the extreme political bigot has now proved itself.
All I can say is, tell that to the British people. The British people must be made up totally of bigots. I do not believe that there is a majority view, or even more than a tiny minority view, among the British people that public ownership should be extended into the sort of industries which hon. Gentlemen opposite have talked about. The growing shopping list of nationalisation now seems to include elements of the pharmaceutical industry, ports, shipbuilding and repair, the air-frame industry, motor insurance, and now perhaps the banks and insurance companies, and the hon. Gentleman was talking of the construction industry as well.
I am sorry that I cannot follow the hon. Member for Kingston upon Hull, East (Mr. Prescott) into his interesting speech about the ports because, as he said, I am not qualified to answer in detail what he said. But I appreciate that in talking about the ports, and in particular his own, he was advancing what was for him an important constituency point.
Taking just the banks and the insurance companies, which have been referred to in the debate, their market capitalisation at the present time is somewhere in the region of £8,540 million. That is roughly their market
 

capitalisation. Even if one refers to that alone, one is talking of very large sums of money indeed.
However, it is the nationalisation of urban building land to which I wish to address my remarks. As I understand from the Leader of the Opposition and the Deputy Leader of the Labour Party, the nationalisation of urban building land is now becoming enshrined in speeches and documents as part of the firm policy of the Labour Party. I have endeavoured with the limited resources at my own disposal—I emphasise, at my own disposal—to estimate the cost of such a commitment. I offer it free of charge to the Labour Party Sub-Committee which is, no doubt, attempting to grapple with the costing of the Labour Party's commitments. I am sure that if anybody is on this sub-committee, it must be the hon. Member for Ashton-under-Lyne. So I offer him a few figures which may be of benefit to him.
The best that I can arrive at is by looking at the Strategic Plan for the South-East which estimated the requirements of land for urban development until the end of the century for the South-East. On the basis of £10,000 an acre, which I am sure the hon. Gentleman will appreciate is considerably below the current market valuation of urban building land, the capital cost would not be less than about £4,000 million to £5,000 million. That is taking the south-east region alone and taking a valuation which is far below the current valuation. We can then see what sort of figures one is talking about when the Labour Party mentions the whole question of the nationalisation of urban building land.
Added to this, some of their spokesmen have also been dabbling with the notion of municipalising private and rented property. On the basis of average compensation paid of about £3,000 a house—which is considerably less, I am sure will be agreed, than many houses owned by ordinary people on average and one and a half times average incomes in this country—this would involve about £8,000 million.

Mr. R. C. Mitchell: Is the hon. Gentleman arguing that when one receives permission to build on a piece of land, perhaps agricultural land, one


is compensated for that at the rate of £10,000 an acre? Surely the compensation should be the existing use value of the land plus a small allowance for disturbance.

Mr. Nott: I have followed the terminology used by the Leader of the Labour Party. I appreciate that the term "current use value" has been used. But in reply to the hon. Gentleman, I have to ask, what about the small builder? What about the construction industry in the South-East and in other parts which, in order to build homes which are so badly needed, has gone out and purchased land already with planning permission? Is it suggested that the builders and the construction industry should not receive in compensation what they have already paid for urban building land? We would be most appreciative if the hon. Member for Ashton-under-Lyne would tell us whether it is Labour Party policy to purchase, on behalf of the nation, urban building land. What exactly is the valuation that will be put on urban building land by any future Labour Government? Of course this is academic, because fortunately we shall not have one. Nevertheless it is an interesting matter for debate.
I can understand that Labour spokesmen wish to seek electoral benefits from the genuine concern which exists in this country on house and land prices. By ill-considered statements they hope to gain public sympathy for ideas which, on serious study, would be shown to be financially completely reckless, if not impossible. We want to hear from the hon. Gentleman how he will finance these commitments.
For the past few months the Government have been lectured by Labour spokesmen on the virtues of a balanced budget. Since the Labour Party has rather surprisingly discovered the virtues of Gladstonian financing, we have had long lectures from right hon. and hon. Members on the Front Bench opposite about the size of the borrowing requirement, which they think is too large. I think that that is their opinion. If that is the case, the only resort available to the Labour Party to finance these commitments is massive additional taxation upon the ordinary working people of this country.
I will come back to that in a moment, but before I do so I will try to deal with the Bolsover Budget. I have had only a few minutes in which to attempt to do this and so I have to take the hon. Member's figures. In taking his figures, I am not by any means saying they are valid, but I take his figures—for corporation tax, capital gains tax to 40 per cent., revoking the cost of unification, estate duty, his figure for a wealth tax, his defence budget savings. I take all those and add them up to £1,408 million. Those are what I take the savings to be that he was talking about. They are not mine.

Mr. Skinner: It is £1,900 million pounds.

Mr. Nott: I do not know where the balance was but I have done my best to add them up and I reckoned it was £1,408 million.
On the other side there were family allowances, free school meals, free milk, food subsidy, fuel subsidy, rent subsidy, and public investment for which he wanted another £500 million. I have taken, broadly speaking, his figures, with one exception. I have not taken his figures for pensions because I thought it would probably be more accurate to take the TUC's own proposals and I thought the hon. Member would not mind my taking the TUC's proposals because I saw that he had the TUC's Budget representations on the bench beside him.
The TUC's own Budget representations would have cost the Exchequer about £1,500 million. These proposals were for an immediate uprating—this was before our uprating announced in the Budget—to £2 for a single person, £3·20 for a married couple rising in November to a pension of £10 for a single person and £16 for a married couple. The total cost of these representations as they were put to us before the Budget would be £1,500 million. On top of that there would have been the cost to employers of another £800 million. All this would have added 1 per cent. to the retail price index, but let us leave that aside.
So, taking the TUC's proposals alone I can only say that these proposals to the Exchequer would have amounted to


£1,500 million which gave me £3,130 million leaving aside the hon. Member's proposals for nationalisation of building land, banks and insurance companies.
So the hon. Member did not have in any way a balanced Budget. It would certainly have very greatly added to the borrowing requirement and perhaps the hon. Member for Ashton under Lyne would like to comment on that.
I should like to clear up one misunderstanding which I think is prevalent in the House. I should like in all seriousness to clear it up. That is what the hon. Member said about United Kingdom private investment overseas. Last year it was £1,350 million but only a small proportion of outward investment was financed from United Kingdom domestic sources. It was mainly financed by foreign currency borrowing. Direct investment was about £600 million, of which £375 million was made from locally-owned profits. In other words, it was ploughed-back profits. Portfolio investment overseas showed a rise to £685 million. This was financed out of borrowing in the Euro currency markets. So it is not true to say, as the hon. Member indicated, that this was, as it were, a flow of sterling— that was the implication of his remarks —from this country into overseas investment. But he must appreciate that the major proportion of overseas investment of British companies in the EEC and elsewhere is financed by borrowing in foreign currencies. Surely this is something we should all welcome on both sides of the House.
However, sometimes some hon. Member opposite breaks ranks on taxation matters and speaks the truth. The right hon. Member for Grimsby (Mr. Crosland) said in April, 1971,
The objectives of a left-wing party require high taxation and public expenditure and rigorous government controls.
The Labour Party recognises that if public expenditure is to grow faster than the economy as a whole then consumer spending must grow less fast. That is another way of saying that the derisory rise in the standard of living of the British people which characterised the Labour Party's previous record in office will be repeated.
I should like to point out to the hon. Member that the rise in real personal disposable incomes during those years of Labour Government was 1·6 per cent. per annum, whereas since we have been in office it has been 4·9 per cent. per annum—that is, more than double the rise in real personal disposable incomes on a per annum basis has occurred since the Conservative administration has been in office than when the Labour Party was in office. If it comes back with the sort of programme of which the hon. Member was talking, or if it comes back with the sort of programme which the hon. Member for Ashton-under-Lyne might advocate—I am sure that he will not advocate it and we shall not hear much from him about the Labour Party's programme—we shall be back in the same old dreary slow rate of growth and economic stagnation which characterised that party's period of office.
In fact the advisers of the Labour Party must realise the impossibility of meeting its commitments by hiding behind the claim that it will finance this programme by extra taxes on the rich. Anyone who has made even the most superficial study of this subject will know that taxing of the rich produces no answer at all to the problem. The right hon. Member for Birmingham, Stech-ford, who has some experience in these matters, put it very well on 11th March last year when he said at Worsley,
It is an illusion to imagine that the gap between the rich and poor and the rest of us can be closed solely at the expense of the rich … it would be intellectually dishonest and in the long run politically disastrous to pretend that increased taxes on the rich can solve the problem altogether. Two years ago, if the State had taken all incomes of more than £5.000 a year the additional revenue at the Chancellor's disposal would have amounted to only about 1 per cent. of Inland Revenue receipts.
I confirm that this figure is still broadly correct. Press reports earlier this month on the Labour Party's snap mini-election manifesto indicated a glimpse of the real truth, that only those above one-and-a-half times average national earnings—that is, those over a weekly wage of about £52 a week—would be asked to shoulder a higher tax burden. I hope that the great mass of working people with incomes above that level read those Press reports of the snap mini-election manifesto. I notice that the publicity for it was quickly


squashed. The average income earners will contrast that prospect with our record while we have been in office which has been massively to reduce direct taxation and to give 80 per cent. of the benefit to those earning below one-and-a-half times average earnings.
The likely effects would probably be far worse than have been reported in the Press. Just as when the Labour Party was last in office and the tax threshold was lowered by 12 per cent. in real terms —we have raised the tax threshold in real terms—its policies would almost certainly lead to the same problem as the Labour Government had then. The claim that the Labour Party can finance its developing commitments by extra taxes on the rich while at the same time raising the threshold and not levying extra taxation on those earning less than one-and-a-half times average earnings is completely bogus, and the hon. Member for Ashton-under-Lyne must know it.
It was argued that there should be increased family allowances, or allowances for the first or only child. This must seem an attractive proposition and it is one that the Government looked at with care. But by far the greater benefit of a simple increase in or extension of family allowances of the sort which the hon. Member for Bolsover proposed would go to the better off. Only about one-tenth of the gross cost would go to help the least well off, those below the tax threshold. The cost of an increase in family allowances substantial enough to be of real value to the non-taxpayer would on this basis be prohibitive.
Attempts are made to dispose of this problem by suggesting that the benefit should be clawed back from all except the poorest. That is what the Labour Government did on one occasion. In practical terms that means reducing child tax allowances so that large numbers of low paid would be brought back into tax. It is even worse than that. Depending on the size of increase in the family allowances, it might mean that the bigger the family, the lower the point at which the breadwinner started to pay tax. I understand entirely the sentiment which underlies the hon. Gentleman's wish to raise family allowances, but the only way in which the money can be concentrated upon the families who need help is

through a scheme such as the family income supplement scheme.
The term "wealth tax" has a good emotive ring and is bound to figure prominently in the demagogy of the Left. The best argument I have ever heard against a wealth tax was set out in a recent pamphlet. I read the relevant extract:
And since any new capital taxes, such as a wealth tax, might be paid out of capital or at the expense of current savings, the extra revenue could clearly not be directly traded off for general cuts in income tax or purchase tax, because of the obvious effects on consumption.
The source is impeccable since it comes from the Labour Party's own document "Into the Seventies" and that passage contains one of the best arguments I have ever read against a wealth tax.
As the hon. Member for Paddington, North said, the real arguments for a wealth tax are not economic and financial. It is difficult to justify a wealth tax on economic and financial grounds. In fact, the arguments are concentrated upon political philosophy and political doctrine. I appreciate that point perfectly well. Here there could be a minor divide between the parties, but there should not be, because we already have some of the highest taxes on wealth in the world. As my right hon. Friend the Chancellor of the Exchequer pointed out in his Budget statement, we have a rate of 90 per cent. on investment income, a rate which is still significantly higher than in almost every other developed country.
Furthermore, we have the most comprehensive system of capital gains tax, at a substantial rate and our yield on estate duty, as page 11 of the Green Paper on inheritance tax shows, is higher than in almost any other developed country. I remember a debate in which I was involved with the hon. Member for Birmingham, All Saints (Mr. Brian Walden) in the Finance Bill Committee last year. Expropriation of all incomes over £5,000 a year would hardly yield more than £100 million. Since the hon. Gentleman's calculations would run the country into expenditure in the region of £100,000 million, it does not get him very far.

Mr. Brian Walden: Since the hon. Gentleman has referred to those Finance Bill Committee


debates, and since he detects between us a "minor divide", may I put this point to him—quite apart from what the Labour Party's policy document devised by the National Executive Committee might be? The hon. Gentleman keeps referring to the effect of expropriated income. There could be some agreement on that but— and I am coming to the minor divide between us—what about the substantial inheritance from capital on which he said our taxes are the highest in the world? Our inheritance taxes are not the highest in the world, and I would ask him to look again at his figures. It pays the wealthy in this country to have no income at all. Anybody with a skilled accountant can arrange for himself to have no income. It is not income that matters in this argument but capital holdings. That is a subject about which the Conservative Party never wants to talk.

Mr. Nott: We debated this at some length last year, but the hon. Gentleman will see the position if he looks at page 11 of the Green Paper on inheritance tax. I think that he will find that on almost any measure this country has a higher rate of estate duty, including reliefs, than any of the Western developed nations. I have no doubt that the hon. Member for Ashton-under-Lyne will soon be referring in his speech to the yield of a capital levy, on which recently I have been answering Parliamentary Questions. No doubt all my answers have been fed into the costings of the Labour Party in their developing programme. But this can be done only for doctrinaire reasons. It cannot be done for financial or economic purposes. The effect on investment and savings would be very serious and the hon. Member for All Saints knows that very well.
The hon. Member for Bolsover commenced his speech in a philosophical vein, and perhaps I might conclude my remarks with a soupcon of philosophy. Put in fundamental terms our philosophy rests on the proven belief that the State exists to serve the interests of the individual. The community derives its strength from the efforts and inventiveness of its individual members, and the function of the State is to make it possible for people to fulfil themselves.
In fashioning the State-citizenship relationship at different times and in different circumstances, it is necessary to strike the right balance between individual liberty and anarchy, and between social good and authoritarianism. In different circumstances the balance must be struck in a different way, but the non-doctrinaire approach of the Conservative Party has allowed it to legislate in the 1870s to protect individuals wishing to join a trade union and to legislate in the 1970s to protect individuals who do not wish to join trade unions. One hundred years ago the factory owners had a disproportionate bargaining strength.
Today the balance of power has shifted. The effects of industrial disputes are no longer confined to the workshop. They frequently affect the daily lives of us all. It was to redress this balance that the Government introduced the Counter-Inflation Bill, and it is the strength of the Conservative Party that it has avoided any ties with particular sections of the community—[Interruption.] The hon. Member for Ashton-under-Lyne, who has suddenly sprung to life—

Mr. Sheldon: The hon. Gentleman must realise that I have, as he puts it, suddenly sprung to life only because I am wondering whether I shall get in at the end of this debate. The hon. Gentleman cannot be allowed to get away with this. There is a strong sectional interest, and the hon. Gentleman knows it. The Government receive hundreds of thousands of pounds from their rich friends in the City. There is no use denying it. We have the facts on record.

Mr. Nott: The hon. Gentleman is quite wrong. In any event how can he talk about a sectional interest when the Labour Party is financed almost entirely by the trade unions? [Interruption.] The overwhelming proportion of the Conservative Party's funds is collected by way of door-to-door subscriptions from ordinary individuals. That may be an unpalatable fact for the hon. Gentleman, but it is true.
It is this freedom from sectional entanglement which has allowed us to overcome the vested interests which nearly always stand in the way of social reform.

Mr. Brian Walden: I am always interested when Tories talk about philosophy. I do not want the hon. Gentleman to slip away too far from a comment of his which interested me greatly. I take his point that the Conservative Party is concerned to see that inventiveness and the successful individual should not be overmuch restrained by the State. To take a non-British example, that would be Henry Ford. I can see the case for letting Henry Ford make millions. Will the hon. Gentleman tell me the case for Henry Ford I being succeeded by Henry Ford II instead of some other inventive individual who makes his own way in the world? Philosophically, that is what interests me about the hon. Gentleman's case.

Mr. Nott: I do not believe that the House will wish me to go back into the estate duty laws of the United States. If the hon. Member for All Saints wants a debate one day on the inadequate estate duty and wealth taxes of the United States which allowed Henry Ford II to inherit a lot of money from his father, I shall do my homework and come to the House prepared to justify or criticise those laws.

Mr. Walden: That is not the point—

Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I think that the Minister of State should be allowed to continue his speech. Other hon. Members wish to speak.

Mr. Nott: I think I ought to conclude my remarks.
Conservative administrations have held office in two out of every three years in the last 100 years—

Mr. Walden: And look at us.

Mr. Nott: That is not because we have any divine right to rule. It is because the British people in general prefer the job that Conservative administrations do to what they get from the disunited rabble which makes up the Labour Party.
There is a functional relationship between political performance and political reward. I am afraid on that basis it bodes very ill for the Labour Party at the next General Election and very well for the present Conservative administration.

3.14 p.m.

Mr. Robert Sheldon: The Minister of State obviously was prepared for a knockabout end to this debate, and I am very sorry that it happened in this way. My hon. Friend the Member for Bolsover (Mr. Skinner) made a valuable contribution, which should have been answered better by the hon. Gentleman.
The Minister spoke about the Bolsover manifesto and the revolutionary comments which came from my hon. Friend. I cannot but compare those remarks with those of the hon. Member for Aylesbury (Mr. Raison), who described my hon. Friend's speech as a relatively mild Socialist programme.

Mr. Raison: Mr. Raison rose—

Mr. Sheldon: The hon. Gentleman called it a relatively mild Socialist programme. This did not agree with the description given to my hon. Friend's speech by the Minister of State.

Mr. Raison: When I said "relatively mild", I meant relative to what we normally hear from the hon. Member for Bolsover (Mr. Skinner).

Mr. Sheldon: I do not think that we shall ever hear my hon. Friend's whole programme. I believe that, heard in this way, it can be described only in the terms used by the hon. Member for Aylesbury. Perhaps the hon. Gentleman was overawed by the peculiar calculating of- his hon. Friend the Minister of State.

Mr. Raison: My hon. Friend had not spoken before I made my speech.

Mr. Sheldon: I mean in what he has just said. Of course, £100,000 million is an absolute nonsense. If the Minister had treated the debate seriously he would not have considered using such a figure.
When it comes to public ownership of building land, we are talking about the profit to be made from it. People who get hold of land, obtain planning permission, and build on it, make tremendous profit. That profit has to go somewhere. We suggest that it should go to the people, whereas the Minister suggests that it should go to the owners of the land. Those sums of money, however he cares to add them up, have to go somewhere. We are saying that they do


not belong to certain individuals particularly favoured either by their speculative skills or through inheritance, and that they should go to the people—in particular those who will live in the homes constructed on that land.

Mr. Nott: Is the hon. Gentleman saying that what the Leader and Deputy Leader of the Opposition are talking about is a tax or an expropriation of development value, and not about the municipalisation of urban building land?

Mr. Sheldon: The hon. Gentleman knows that the Labour Party's scheme is to take into public ownership land which is suitable for building. The precise extent of this proposal has not yet been determined, but that is what it is about

Mr. T. G. D. Galbrasth: Mr. T. G. D. Galbrasth (Glasgow, Hillhead) rose—

Mr. Sheldon: Perhaps the hon. Gentleman will sit down. He has only just come into the Chamber, and he has not heard the exchanges which have taken place.
Vast sums of money will be made, as we saw last year. They should be an example and warning to anyone in this House and elsewhere who thinks that this country will invariably allow a certain favoured section of the population to make vast sums of money with miserably small taxes being paid on them. We have made it clear that this situation will not be allowed to continue. We note the encouragement given by the Minister of State to those who hope that it will continue.
We have noted the comments made by the Minister in his addition of the totals of the so-called Budget of my hon. Friend the Member for Bolsover. The Minister did not add up his figures correctly. I made them broadly comparable with those amounts of revenue that my hon. Friend suggested raising. We must pay tribute to anyone who does a piece of work of this kind and brings us all afresh to the problem of how to obtain certain changes of a kind that many people would favour.
In my opinion the rôle of government as seen by the Opposition differs little from the rôle of government as seen by the Government. Before the Industrial Revolution the Government's rôle was

extremely limited. The turning point was the introduction of the Factories Acts, when the Government decided that they had to control some of the excesses in industry, and thereafter developments followed a fairly broad pattern.
The next major change came at the beginning of the Second World War. The most important element was the White Paper on unemployment policy, published in 1944. When the Government of the day decided that they had to have an unemployment policy, everything else stemmed from that. It meant that for the first time in this country the Government had to intervene in economic matters—something which they had previously left outside their province.
Because of the Government's action, the country was committed to some sort of planning and control in order to produce the full employment policy that had been announced. That was a bi-partisan policy which the Conservative Government inherited, as did the following Labour administration. In 1944 for the first time, we saw the direct involvement of the Government in the economic policy of the country.
Given that intervention in economic policy, we moved on to 1959, to the next climacteric, when Harold Macmillan won his election on the slogan of the country's never having had it so good. There was then another big change. Up to that time, the Government had been intervening in economic affairs only to make sure that there was full employment, but they took credit not just for their full employment policy but also for the prosperity of the country. They said, in effect, that the economy was doing well and that people were earning more money than ever before as a direct result of what the Government had done. The corollary to that is that if things go badly, if the economy turns down, if there is a fall in employment, or if the living standards of the people do not rise sufficiently, the blame must rest at the door of the Government.
In 1959, the Government's claim to have improved things was partly fortuitous, because they did not have the power over industry and the economy to make the improvements for which they claimed responsibility. But no Government will ever again, at an election, be


able to disclaim involvement in the well-being of the country economically, in the standards of living, in the provision of jobs, housing, education, and so on. These are now firmly within the province of Government, and the Government will be judged on their performance.
What happens when the Government do not have sufficient power to implement their policy? That, after all, is what happened in 1962. Having claimed that they were responsible for the economic success of the country, there was then a recession. Far from wringing their hands and trying to persuade people to act in a better way, the Government were in a dilemma. They had to intervene directly in order to change the situation, and they did so because they realised that they would be judged on the results.
Because of the situation then, the Prime Minister sacked one-third of his Cabinet and we saw the introduction of a National Incomes Commission. That was an interesting development, because the commission was the first involvement of the Government in a prices and incomes policy. Once a Government have failed in this we cannot be surprised that Governments return to the theme of producing the sort of economy with which they might justifiably go to the electorate.
We are moving into a situation not very different from that pictured in Private Eye, in its column about "Heathco", under its managing director, the present Prime Minister. In an oversimplified form, this pictures the sort of changes which are being made. Far from cajoling people to act in certain ways and offering incentives, the Prime Minister is actually taking direct action to ensure that his policies come about.
The most interesting and significant thing is that the ideas of the two parties about the kind of economic management that is necessary are converging—apart from the hiccough of Selsdon. It is no good talking about public ownership being good or bad. Governments are forced to intervene in industry. If we had produced the counter-inflation policy of the present Government it would have been regarded as the most Socialist act in our history. The significant thing is that it was introduced by a Conservative administration So I notice a rapid and growing convergence between the

policies of this Government and those of a Labour Government in controlling industry, the economy and the whole system which is put to the test every four or five years.

Mr. Galbraith: The hon. Member has been saying some interesting things. Do they mean that he supports the Government's present prices and incomes policy?

Mr. Sheldon: If the hon. Member had been here on other occasions he would often have heard me speaking on this subject and talking about the nonsenses of the present Government. The search for this kind of solution is a common one. What is not common is the division of the spoils, the rewards. That is becoming increasingly the major distinction between the two parties.
There were always two strands to this matter—the way in which we would operate the economy as opposed to the present Government's way, and what we would each do with the results of the wealth so created. The speech of the Minister this afternoon has made the breach even wider than it was before.
The fundamental difference between us is the much greater emphasis that we give to a continuing and large movement towards greater equality between people—between those at the top of our wealth scale and those at the bottom. We know that the increase in wealth at the top has risen rapidly, as my hon. Friend the Member for Paddington, North (Mr. Latham) so well pointed out, and that last year—no one has figures for this, but no one can fail to make a qualitative assessment—more millionaires, in real terms, were created than at probably any time in our history. That is not surprising when one considers the enormous increase in property values and the activities of some people in this area.
The Inland Revenue statistics about the higher levels of wealth are an absolute nonsense. No one can accept those figures, which wholly and grossly understate the real position because of the necessary limitations upon the manner in which the statistics are obtained. The figures I quoted showed, for example, that agricultural land with vacant possession was valued in 1971 at £191 per acre


in England and Wales. That is far below the price that it can command at present. Attempts to analyse estate duty and the wealth of individuals again grossly underestimate personal and private wealth.
To see this level of riches existing for a number of individuals at no obvious benefit to the community and at a time when we have a prices and incomes policy is an affront to the people. For the Minister of State to try to defend that affront is disgraceful. To talk in terms of income tax and surtax when such large areas of wealth lie outside the operations of the Inland Revenue, and on that basis argue that there must be sacrifices by those to whom sacrifice is very real is something that we cannot accept.
The circumstances in which people have supported the Conservative Party —as stated by the hon. Gentleman—are likely to change very considerably. One of the reasons is that people are now by and large coming to understand better how the rich are living. That understanding is still imperfect, but it will increase. Through it, people will begin to realise and understand the kinds of wealth which at present exist. The very fact that the present hostility to the Government's prices and incomes policy has reached such a level is an indication of the growing understanding of the differences between the sacrifices being demanded of different elements of society.
It is no use trying to claim that there is need for these riches as a means of incentive to those who are making money. I have never understood that the incentive to a property speculator is of benefit to the nation. The Government were elected largely because they promised to provide incentive to economic expansion. The pitiful levels of investment since they took office expose the failure of that policy, and that failure is implicit in the Government's revised economic policy.
My hon. Friend the Member for Bol-sover was right to talk about the need for one nation. In some respects, we are more divided now than for some time, not so much because the divisions are greater but because people realise them

more readily than they used to. When one is sitting in a damp sitting-room, with inadequate heating and very often with inadequate food, and seeing on television the better life which others are enjoying, one realises, the great division of society created by such conditions. The very mobility of people breeds a greater division. As people move outside slum areas and see how in other parts people live so much better, it makes them less likely to endure the divisions than they would have been otherwise.
For millions of people, the ideas of democracy and high living standards tend to end at the factory gate, when they enter for eight hours of pretty wretched toil, during which they are subjected to all the petty humiliations of factory life—separate toilets and separate canteens, for example. Leaders are not so much leaders as bosses. To such people, to talk of a one-nation society is little more than a bitter joke.
Many distinctions are made between the people who clock in and those who do not, in almost every part of a factory. Distinctions are made between a certain favoured few and the others. These divisions are becoming less acceptable now than in the past.
The Minister of State asked me to say how we would handle a wealth tax so that capital was not turned into income. We cannot convert capital to income, any more than the hon. Gentleman has been able to convert tax reductions into borrowing requirements. I was surprised to hear him boasting about tax reductions. I thought that the day when the Government could boast about their tax reductions was past, and that it was realised that all they have done is to borrow the money instead of raising taxes. It would not be our intention to turn capital into income.
A wealth tax would not end the discrepancies of large elements of wealth in our society. It would be a move in the right direction, as would be most of the points made by my hon. Friend the Member for Bolsover. A further advantage is that it could give a survey albeit an imperfect one, of the elements of capital in Britain today. An annual survey, or whatever it might be, would be of some value in assessing some of the large holdings of wealth in Britain.
My hon. Friend the Member for Bol-sover talked about the need for an increase in the capital gains tax. That tax was introduced eight years ago at 30 per cent., and it has remained unchanged. The amount coming from the capital gains tax is modest but valuable. Most of it comes from the sale of shares in quoted companies. We can start moving in the direction of greater pro-gressivity in capital gains taxation. An investigation of general taxation might be worth while.
Income tax is most important. It is wrong that a person with a modest level of income should start to pay income tax at a rate of 30 per cent. When such a person has to pay income tax at that rate—

Mr. Nott: It was the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) who abolished the reduced rate band—I am sorry; it was the hon. Gentleman's Government that took away the band of tax below 30 per cent. I do not want to confuse it with the earned incomes policy.

Mr. Sheldon: I accept that. I disapproved of it at the time, as the hon. Gentleman will recall, and I disapprove of it now. In fairness to my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) he introduced in 1968 a special charge on the payers of high levels of surtax. This is a matter which my hon. Friend the Member for Bolsover considered. That was at a time of economic difficulty not dissimilar from the present difficulties. The Government have not yet brought in such a charge.
There is a very high starting rate of marginal taxation, and it will not be as steeply progressive in the future as it was. As we know, for earned income it levels off at 75 per cent., instead of the 90 per cent. level that previously obtained.
The Chancellor cannot, in a Budget coming at a difficult period in our economic situation, start giving away this £300 million. The hon. Gentleman made fun of the fact that people had different ways in which they would use the £300 million. Of course this is so. What we are all saying, however, is that there are many better ways of spending £300 million than giving it to surtax

payers. By producing a list of ways of spending £300 million which we think are more desirable than that selected by the Chancellor, we are saying that the Chancellor has his priorities wrong and that our priorities are better.

Mr. Nott: The hon. Gentleman must not say that £300 million went to surtax payers. That is a gross inaccuracy that has been corrected again and again from this Front Bench.

Mr. Sheldon: So it is those with investment income and surtax payers who will benefit under the present Chancellor.
One element has not been mentioned so far in the list of unfairnesses in which members of a society are treated by this Government. It was mentioned only briefly in the Budget debate by my hon. Friend the Member for Gateshead, East (Mr. Conlan), who pointed out the fraud the Government are perpetrating in their savings schemes for the less well off.
The savings certificate produces a rate of interest of 5·7 per cent. Save-As-You-Earn produces 7·2 per cent. Premium bonds produce about 5 per cent. The Post Office Savings Bank produces a grossly inadequate rate of interest, and this is a peculiar feature of ordinary people's savings. It is disgraceful that money is being mulcted from ordinary people in this way when they must pay interest at rates of 9 per cent. and 10 per cent.

Mr. Nott: The hon. Gentleman's yields on all the National Savings securities that he mentioned are quite wrong. On the investment account of the National Savings Bank the yield is over 7 per cent. On National Savings certificates it is certainly more than what the hon. Gentleman says.

Mr. Sheldon: I quote from the figures which were given to me by the Library— National Savings certificates, decimal issues held five years, 5·7 per cent.; Save-As-You-Earn kept up to 5 years, 7·2 per cent.; held for a further 2 years 76 per cent.
The way in which ordinary people borrow money shows again that they are taken for a ride. On hire-purchase transactions they pay interest at rates ranging from 15 per cent. to 40 per cent. On trading checks they pay, to one particular firm, a rate of interest of 28 per cent.
A Government who are concerned about equities, as this Government so frequently allege that they are, might have taken action to reduce the disparity between the rate at which ordinary people lend their money to the Government and the rate at which they have to borrow from finance people or hire-purchase people for the goods they buy.
This is particularly sad, because when I drew attention to this two years ago I was promised that early action would be taken by the Government. Since then interest rates have soared further and further. The value of people's savings had declined seriously as a result of the Government's inactivity.
The Minister of State must accept that the task of any Government must be to create this one nation which is the boast of the present Government but which they utterly fail to endorse. The only way in which they will create one nation is by not giving to those with great wealth the ability to make it and enjoy it. The Government's task is to redress the gross imbalance. My hon. Friend the Member for Bolsover made a start towards redressing the imbalance.

3.45 p.m.

Sir Stephen McAdden: It was not my intention to intervene in this debate, but having heard the opening remarks of the hon. Member for Bolsover (Mr. Skinner) I afterwards popped in and out of the Chamber at frequent intervals to hear him. I confess to a constitutional inability to listen to any Member of Parliament, however distinguished, who speaks for more than an hour. I mean no disrespect to the hon. Member in saying this; I could not listen even to a Chancellor of the Exchequer who spoke for as long as that. Without wishing in any way to be presumptuous, I would say that if any hon. Member wishes to have his motion discussed and carried it is always wise for him and his supporters to make short rather than long speeches, otherwise they have no chance of getting their motion proceeded with by the House.
I was interested in what the hon. Gentleman said because I am always interested in hearing someone advocating a Socialist programme. I have been interested in the subject of Socialism for

many years. One of the difficulties in trying to find out what a Socialist programme is is that there are almost as many definitions of Socialism as there are Socialists. When he talks with his fellow Members of the same party the hon. Member will discover that quite a number of them will not agree with his programme. He will not have failed to notice that his hon. Friend the Member for Ashton-under-Lyne (Mr. Robert Sheldon) gave very tepid support to his ideas, and seemed much more concerned in attacking my right hon. Friend's present Budget than in giving support to a Socialist programme. Unless the hon. Member gets more than tepid support for his Socialist programme from his Front Bench speakers he has no great chance of making progress with his motion.
The hon. Member for Paddington, North (Mr. Latham) spoke of the various class divisions in our society—lower, middle, upper working class, and so on, It is true that we have these artificial divisions in our society, but they show a very significant difference from the state of affairs 150 to 200 years ago. One of the most significant features of our history in the last 150 years has been the emergence of a class in society which did not exist before—the middle class; often derided and despised but still a very solid level in our society. It first consisted of people who were originally some of the poorest in the country but who, by saving some of what they produced and putting it aside for a rainy day, managed to advance their position so that in time they formed a solid wedge in society—a wedge which serves a very useful and effective purpose.
I have read a great deal on the subject of Socialism, including that monumental work by Professor Henshaw, "A Survey of Socialism", in which he stated that Socialism is a complete philosophy of life based upon the morals of the barnyard and the economics of the madhouse. The first part of that statement is usually acceptable but the second part does not go down so well.
It is true that the whole case for Socialism rests upon the economic teachings of Karl Marx, and I was rather surprised that the hon. Member for Bolsover skated a little lightly over this aspect. He said that he had read the first page of "Das Kapital"—

Mr. Skinner: I got beyond that.

Sir S. McAdden: I am glad to hear that, although it must have been frightfully boring. I once had to read right through it. It has been said that to the working class, "Das Kapital" might just as well have been written in Chinese. I am sure that the hon. Member and I will agree that the ordinary worker in this country would not know what it was all about. Be that as it may, I do not think that the Labour Party is Socialist. The Socialist Party of Great Britain—"the small party of good boys"—spends all its time exposing the fact that the Labour Party is not Socialist at all. I am afraid that the hon. Member for Bolsover has a good deal of converting to do to get some convinced and dedicated Socialists into the Labour Party. If I can give him any help I will do so, because the more genuine Socialists we can get into the Labour Party, the more certain it is that we on the Conservative benches will win the next General Election.
I am convinced that the speech of the hon. Member for Bolsover will be a great asset to us during the election campaign. As for the ideas that he put forward for the nationalisation of the insurance companies—fancy dragging that up again. We had it years ago. It was forgotten at the time that the Co-op had an insurance company. The Co-op kicked up such a row that the advocates of the nationalisation of the insurance companies had to back-pedal pretty swiftly. All the insurance companies in this country got together and they cajoled, advised and persuaded all the insurance men to go knocking on doors for a penny and twopence a week. They were canvassing agents to defeat this monstrous policy. They are going to do it again, and I am very much obliged to them. We shall get tremendous assistance from the Labour Party if they pursue this policy of the nationalisation of the insurance companies.
I appreciate that there are others who wish to speak and, in deference to your wishes, Mr. Speaker, I will now resume my seat.

3.51 p.m.

Mr. Thomas Cox: In the few moments remaining before this debate ends, may I congratulate my hon. Friend the Member for Bol-

sover (Mr. Skinner) on having introduced this subject for debate. I should like to comment on his references to land and housing problems generally.
I am sure that many hon. Members on both sides of the House represent con-situencies in which there are appalling housing problems. I represent a London constituency, and I have in my constituency and, indeed, in my borough some of the poorest housing, and some of the worst housing problems existing in London. As my hon. Friend said, left to the private market the kind of housing problems that we face will never be solved because, unfortunately, it is not in the general character of the people who are involved in the private housing market to want to help those who are in greatest need.
There have been many debates and we have asked many questions on problems concerning housing, land, rents, the abuse of improvement grants and housing costs. While in the answers that we have received a certain amount of sympathy has always been shown, invariably the stock answer that we have been given is that our problems can be traced to two basic reasons—the building workers' strike of last year, and the wages of building workers. We were given those reasons repeatedly. I suggest that those two factors have had very little effect on many of the abuses of which hon. Members on this side of the House are aware.
My borough is the second largest of the 32 London boroughs. At present it has over 7,000 people on its housing list. To give any hope to any of those people, many of whom live in bad housing conditions, it is necessary to accommodate them in housing provided and developed by local authorities. Last year, despite all the problems with which we were faced in a London borough, we were able to complete over 1,100 houses and we were also able to start 580. At the same time, while we had this appalling housing list and we were trying to reduce it by building new houses, there were 1,965 private houses empty in the London Borough of Wandsworth. They had been empty not just for a day or two or even a week or two. Many had been empty for months, and some for years. We on this side of the House know the uproar which would follow if the council attempted to requisition those properties or place compulsory


purchase orders on them. Yet why should they remain empty as they do?
The point my hon. Friend the Member for Bolsover (Mr. Skinner) has been making today is that we should be tackling this housing problem. People come to me as a Member of Parliament, and they go to their local councillors, and ask, "What can you do to help us?" We know that there is only a very slight chance of our being able to help them in the near future. How do we justify 2,000 houses being left empty? It does not matter to the landlord how long the properties remain empty, whatever the rent may be, because when eventually the property is sold it will be at a price which takes account of any loss of rent incurred while it was empty.
What is happening now in London is of no help to people in housing need. In last Sunday's Observer there were announcements in respect of properties for sale at £18,000. How many people in housing need can afford that? It may be sold to be converted into flats. Property was advertised as "ideal for investment". We all know what kind of investment it will be. If one can afford to pay £20 to £25 a week in rent or £10,000 or £15,000 to buy a flat to live in, that may solve one's housing problem for oneself but it does not help the people we represent who are in housing need.
That is why I support so strongly my hon. Friend's remarks about housing. Unless we start to say we believe in the municipalisation of housing, unless we say we will curb the enormous profits made from the selling of building land, we shall not begin to solve the problems, which face us week after week in our constituencies.
Hon. Members have seen the London Property Letter, and I will quote one

or two items from February's edition:
Since the Tories returned to power house prices have boomed as never before, giving dealers a rising market to profit from. Landlords have started to cash in on the new bedsitter boom. Converting properties into flats for sale is becoming big business. The Government have been extremely generous with improvement grants, which make this operation very profitable.
Or again:
Someone is going to make a killing out of this, and it might as well be you.
How can we justify that kind of language or that kind of action in London or any of our large cities when we know —especially those of us who represent cities—the appalling housing problem our people are facing? We cannot justify it, whether we are Labour or Conservative Members.
That is why what my hon. Friend was saying today is relevant. We must start to tackle the housing problem; we must start to get that sort of society of which a good deal was said during the election, though we do not hear so much about it now—the one-nation society. That was what the Prime Minister talked about, but everything he has done since he has been in power has been to divide the country, and not to unite it. Certainly for London Members, but also for Members representing big cities, housing is the key issue and nothing divides society more than the appalling housing standards and the reluctance of the Government to do anything about them. This debate has served a useful purpose. My hon. Friend has touched on many subjects. Many of us who were not in the House during the period of office of the previous Labour Government were highly critical of it, but we hope that the lessons have been learnt.

It being Four o'clock, the debate stood adjourned.

Orders of the Day — LOAN INTEREST RATE PUBLICATION BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 6th April.

Orders of the Day — ELDERLY AND DISABLED PERSONS (WARNING DEVICES) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — DIVORCE LAW REFORM (SCOTLAND) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — COMPENSATION PAYMENTS BY COMPANIES, ETC. BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — DANGEROUS DRUGS AND DISABLED CHILDREN BILL

Order read for resuming adjourned debate on Second Reading [9th February].

Hon. Members: Object.

Debate further adjourned till Friday next.

Orders of the Day — WEIGHTS AND MEASURES (UNIT PRICING) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — FOOTBALL BETTING LEVY BOARD BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — MECHANICS OF PAYMENT OF ALIMENT BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

Orders of the Day — CIGARETTES (PROHIBITION OF ADVERTISING) BILL

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday next.

ADJOURNMENT

Motion made, and Question proposed. That this House do now adjourn.—[Mr. Rossi.]

Orders of the Day — ART COLLEGES (STAFF RESOURCES)

4.2 p.m.

Mr. Michael Barnes: I am glad to have the opportunity to raise the subject of the implications for art colleges of the report of the Pooling Committee. Art education in this country has achieved a world renown during the last decade. The success of art colleges in London like Chelsea, Central, and St. Martins, and indeed Camberwell, Kingston, and Goldsmiths is well known. Writing in The Guardian a year or so ago, Mr. Patrick Heron claimed that Leeds College of Art was the most influential in Europe since the Bauhaus.
In recent months, there has been a series of pronouncements that have caused great consternation and a sense of outrage in art colleges at the prospect that the whole basis of art education will be changed in two important respects.
First, there is the proposal that students should need two A levels to gain entry and that they should enter diploma courses straight from sixth forms, with the consequent loss of foundation courses that this would mean. There appears to be some difference of emphasis about this proposal between the National Council for Diplomas in Art and Design memorandum that was issued last month and the joint statement, also issued last month, by the National Council and the Council for National Academic Awards. The joint statement appears to be much less dogmatic on the question of two A levels for entry than does the National Council statement. I should be grateful if the Minister would clarify the position, because there is a great deal of confusion about exactly what is proposed.
Any move in the direction of requiring two A levels for entry will inevitably be a retrograde step. Artistic talent is not the same as academic ability. I quote an extract from the speech of Lord Esher, Rector and Vice-Provost of the Royal College of Art, who said at Brighton last month.
In 1967 the last year in which class degrees were given at the Royal College of Art of those who received Firsts, 94 per cent were without two A-levels and of those who received 2·1's 82 per cent. were without two A-levels. These

were presumably among the most talented artists and designers of their generation.
The effect of insisting on two A-levels for entry will mean that it will be much harder for students from educationally under-privileged backgrounds to gain entrance to art colleges. These are students whose intelligence is essentially non-verbal, but in terms of art they are highly talented. I am sure that this is a point which the Under-Secretary of State, with his appreciation of the arts, will understand.
The main subject of this debate is the report of the Pooling Committee entitled Assessment of Curricular Activities and Utilisation of Staff Resources in Polytechnics and Further Education Colleges. That report could mean two things for art colleges. First it could mean that the individual basis on which art and design is taught at present will disappear. Secondly, it could mean that many students will be deprived of access to, and teaching by, practising artists.
I should like to ask one or two questions about the status of the report. The Committee says in its introduction that the report is for general guidance only, but Sir William Alexander, who is the Secretary of the Association of Education Committees, has stated that the report was considered by all the associations and approved by them and therefore had their approval before it was issued.
The report is at present being implemented at the Maidstone College of Art, and from the reports I have heard it seems that it is being implemented in the worst possible way with little consultation between Kent County Council and the College. The cuts put into effect at Maidstone in terms of the amount of money available for employment of part-time teachers mean that the amount of money there will be reduced from £60,000 in the current year to £20,000 in 1976–77.
An earlier memorandum issued by the Pooling Committeee on staff-student ratios for advanced levels of work in polytechnics and colleges of further education conceded that art colleges were a special case and said that no redundancies should take place simply to comply with the proposed ratios. But in reading the documents one wonders
 


whether the Pooling Committee understands the implications for art colleges of what it is proposing. There are special characteristics about art and design education which are not normally present in other disciplines. These characteristics justify a higher level of staffing. For example, there is the individual nature of each student's work. In many cases the innovatory nature of that work expands art into areas where it has not been before and involves the use of new materials. These matters require a wide variety of staff with different approaches and different areas of specialisation.
We must also consider the fact that when students make something with their hands they often work long hours, and this is particularly true of jewellery and silversmithing. It means that studios and workshops will be used for long periods during which staff supervision is required. This results in a situation where art students have relatively short "taught" hours but work long curricular hours. For other students 18 hours per week may be normal, but for art students supervised hours of study are likely to be 35 to 40 hours per week. It is essential in any proposal such as the Pooling Committee's report that there should be a counter-weighting factor for art colleges.
I come now to what I believe to be the most important matter to result from this report. It is the situation of practising artists who act as part-time teachers. These part-time staff may be working one, two or three days a week or may be working on short block contracts, and they are occupied as practising artists and designers during the rest of the week. In addition to providing a variety of specialised skills in art colleges, they bring practical and up-to-date knowledge of the subject to teaching.
When the memorandum of the Pooling Committee says that there should not be redundancies simply to comply with the ratios, it ignores the fact that many of these part-time staff are on short-term contracts and therefore that there is no need for them to be made redundant. It can simply be a matter of not renewing their contracts. But in any event if the report were implemented it could mean that as many as two-thirds of the part-time staff in art colleges would have to

go. That seems to be the direction in which Maidstone College of Art is heading.
It may be said that some full-time staff in art colleges are also practising artists. But the demands of teaching make this very difficult in practice. For most practising artists who teach there comes a real point of conflict between their own programmes of work and their teaching if they try to do too much teaching and, if they are teaching for four days a week, they are unlikely to be producing much work of their own.
There may be many subjects which are perfectly well taught by people who teach rather than by people who do, but art is not one of them. The nature of art makes it essential that young men and women who want to be artists have access to those who are themselves practising artists.
For all these reasons I urge the Undersecretary to give guidance to local education authorities about how they should view this report of the Pooling Committee as far as art colleges are concerned. I hope that the hon. Gentleman will appreciate the point that I am trying to make about the need for further guidance from the Department about how this report should be viewed and acted upon. Such guidance seems to be very badly needed.
As I said earlier there is a great sense of outrage amongst students and teachers about what they fear is about to be done to art education. They feel that art colleges are being meddled with by those who do not understand them. As the noble Lord, Lord Annan reminded us in the Dimbleby lecture on the universities which he delivered some months ago when he quoted Dr. Arnold,
No one ought to meddle with universities who does not know them well and love them well.
The same goes for art colleges.

4.13 p.m.

The Under-Secretary of State for Education and Science (Mr. Norman St. John-Stevas): I am most grateful to the hon. Member for Brentford and Chiswick (Mr. Barnes) for raising this most important matter. If the hon. Gentleman will allow me to do so, let me congratulate him upon the extremely clear


and cogent manner in which he presented his argument.
Before I attempt to answer the points raised by the hon. Gentleman on the Pooling Committee's report, I should like to say a few words on the matter of entry qualifications to the Diploma in Art and Design.
The first point that I should make is that the question of future requirements for entry to the Dip.AD is, of course, the concern of the National Council for Diplomas in Art and Design. That is the body that awards the Dip.AD and validates the courses. It was asked to consider them by my right hon. Friend in the light of new developments and has done so. In its recent memorandum, widely circulated, the council has set out the changes that it has in mind for the future and explained the main lines of argument which led to its conclusions. That is a long and detailed document, issued by the council, which has to be studied. It does not propose two A levels as the only acceptable entry qualification but includes alternatives calling for further consideration and discussion. It has something to say about foundation courses, and the wording it uses does not imply a sudden extinction of these. As to the revised conditions of entry, the document explains that the council considers that it would be inappropriate to require these of students entering diploma courses before September 1976.
The national council has also recently issued a joint statement with the Council for National Academic Awards, which the hon. Member has also mentioned, which refers to entry qualificaitons in the context of a proposed merger between the two bodies. That statement says that five O level passes and a satisfactory attainment in an appropriate foundation course would, in the first instance, be acceptable for entry to degree courses in art and design, but it is to be expected that in general, entry qualifications for such courses would come to be similar to those for other degree courses. This is in the context of a merger proposed, subject to agreement and the necessary processes, for September 1974. On this point of entry qualifications I think it would be mistaken to see a conflict between those

two statements. These are, of course, statements not of the Government but of the councils responsible.
I turn now to the question of the Pooling Committee's memorandum. First, I must explain the background. The system known as "pooling" operates in relation to the provision by local authorities of colleges of education and of advanced further education courses at polytechnics and other colleges, including colleges of art. It is a method of distributing among all local education authorities expenditure incurred by only some of them where this is thought to be the equitable course. However, this method of distributing expenditure has the effect of weakening, for the providing local education authority, the normal financial constraints. For this reason my right hon. Friend's predecessor who was in office in 1968 set up the Pooling Committee, at the request of the local authorities, to exercise a general oversight of expenditure incurred by local education authorities in the provision of those services whose costs are pooled in the way I have described.
It is, of course, the local authorities which are responsible within our system, for making the actual provision of education in the establishments which they maintain. The membership of the Pooling Committee is drawn from the local authority world, comprising representatives nominated by the appropriate associations and committees. My Department provides the chairman, the secretariat and professional and technical support.
Some time ago, as part of its proper function—the promotion of efficient and economic management of the institutions whose expenditure is pooled—the committee embarked upon a thorough examination of the staffing arrangements in polytechnics and other colleges of further education which offer a substantial element of courses at the advanced further education level. This was the exercise which led to the production by the committee last year of a memorandum on student staff ratios for advanced level work in polytechnics and colleges of further education. The memorandum is the document that recommended the adoption of certain student-staff ratio bands.
Just to get the position clear, however, I should explain that, after having arrived at these recommendations, the Pooling Committee considered that the work it had carried out made it possible to suggest to authorities and colleges methods of compiling and presenting information about students and staff. A separate document setting out these methods was accordingly prepared and, at the invitation of the Pooling Committee, the local authority associations subsequently arranged for this to be published. The resultant booklet is a descriptive paper about methodology and does not make recommendations about student-staff ratios as the memorandum did. I am making this clear so that there should be no misunderstanding, and in my further remarks I shall be referring to the memorandum alone.
The subject of the memorandum is student-staff ratios for advanced level work in polytechnics and colleges of further education. It will be seen therefore that the memorandum related to work at this level in the whole field of further education and not just in colleges and departments of art, which account for a relatively small proportion of the whole.
The committee's first step was to collect the facts on staffing arrangements. Thereafter, the provisional proposals were, I understand, discussed with representatives of the teachers and other interests in the further education service. This included discussion with the bodies representing art institutions and art teachers.
In reaching its final recommendations the committee gave very careful consideration to the views and comments submitted by representatives of the various organisations in the further education service with which its provisional proposals had been discussed. Eventually the committee submitted the memorandum to the local authority associations, and it will be noted here by the hon. Gentleman that the committee's recommendations were addressed to the local authority associations and not to my right hon. Friend.
The memorandum recommended the associations to inform maintaining authorities, polytechnics and colleges of what, in the committee's opinion, could be regarded as reasonable norms of student-staff ratios for advanced level work. It was the local authority associa-

tions which, after consideration, circulated it last August and commended it to their members, namely the authorities responsible for maintaining the polytechnics and colleges. It then became a matter for the individual local education authorities to consider the application of the memorandum.
The point that I stress to the hon. Gentleman is that the memorandum is purely advisory. It is not mandatory in any sense, but of course individual authorities will pay great attention to the words of Sir William Alexander. Anyone who works in the education field would be wise to heed what Sir William says, but it remains for the individual authorities to decide in what way and to what extent they should apply its recommendations to the colleges they maintain. The responsibility of authorities and governors of individual institutions for determining the staffing of the establishment remains theirs and has in no way been changed by the issue of the memorandum. I hope that that makes clear precisely what is the status of this memorandum.
The recommendations in the memorandum are quite simple. For the purpose of student-staff ratios, the separate faculties and departments in polytechnics and colleges were to be grouped under two main groups, and to each of these two groups overall student-staff ratios were to be applied. Art and design is included in Group 1, along with technology, engineering, science, architecture and certain other faculty areas for which the more generous of the ratios is proposed.
The Pooling Committee expressed the belief that it should be possible for all colleges to make the necessary adjustments to achieve the ratio, which is not expressed as a single figure but as a band within which the ratio should fall, within a period of about four years from the date of the memorandum, and added that in no case should staff be made redundant simply to comply with the staffing ratios. The Pooling Committee's memorandum announced the committee's own intention to review from time to time the levels and operation of the ratio bands that the memorandum recommended, and when any such review takes place I have no doubt that the committee will take into account the experience of authorities and colleges, and of other interests concerned


in the operation of the memorandum. But it is early days yet, and I think it right to say to the hon. Gentleman, who has been so vigilant in this respect, that it would be wise to wait to see how things turn out before passing final judgment.
I now come to the particular question of the implications of these recommendations for art colleges. The memorandum had some special comments to make on art colleges, in respect of which it noted that at the present time there appeared to exist a number of additional features resulting in average student/staff ratios lower than the ratios in colleges generally. From what it said in the memorandum it is clear that the Pooling Committee itself positively advocated sympathetic consideration by authorities for the area of art and design and the special difficulties that might arise. I am sure that all those concerned with the interests of art and design education will welcome this recommendation of the Pooling Committee's memorandum, and it is an approach which my right hon. Friend and I would underline.
One factor often referred to—the hon. Member mentioned it—is the important place, in such teaching, of part-time staff who are practising artists and designers themselves. It will be appreciated that there is nothing in the memorandum of the Pooling Committee to say that part-time staff should not be employed, and certainly nothing in the policies of my Department to prevent the employment of part-time teachers in further education. I am sure that where there can be some practising artists and designers teaching part-time, this is an uncoven-anted gain to a college; the authorities, polytechnics and colleges will themselves know that this is the view of the National Council for Diplomas in Art and Design, since it states in its Memorandum No. 1:
The employment of part-time staff and visiting lecturers who are practising artists, designers or other specialists of repute is to be regarded as strongly desirable".
Not that this is to decry full-time staff, since the NCDAD says:
All teachers should be practitioners in their own field ".
The artist's lot in our society is not a happy one. While public and private

money is poured out on a whole range of projects, some good and some bad, not nearly enough is being done for the creative artist—yet he is the one who most enriches, in the true sense of the word, our society. He does something to bring transcendental values into a society which is suffering from a form of spiritual starvation. For this he is offered by society, if not a stone, at any rate a crust. I should be the first to deplore any move to snatch from him or her such crusts as are available.
Havng said this, I would add that efficiency and economy in the growing provision of higher education is a proper concern not only, in further education, of the local authorities whose representatives constitute the Pooling Committee, but also of the Government. Hon. Members will be aware of the broad view on staffing standards in higher education in paragraph 126 of the recent White Paper "Education: A Framework for Expansion". This said that, in the Government's view, the financing of universities and of non-university higher education should be based on the assumption that staff—student ratios could be modified by the end of the decade to an average level of about 10: 1 and that the Government considered that a gradual transition to this average figure should be possible without lowering standards.
Standards are important, and this applies in art and design education as elsewhere. I am sure that local education authorities, in considering the recommendations of the Pooling Committee and their application, will keep this very much in mind, and will use their discretion in the application of the recom mendations, taking full account of all local circumstances.
Given the background to the memorandum and the body which produced this, I do not see it as the place of my Department to offer explicit guidance to the authorities on how they should carry out functions which are their own responsibility, and accordingly I do not contemplate the issue of guidance from the Department to authorities on the implementation in respect of art colleges of what is in itself a guidance document circulated by the authorities' own associations. But no doubt what I have said in this debate will be brought to their attention and noted by them.
I should like to conclude by referring specifically to the art colleges and departments. It is the local education authorities which have built up the provision to its present high standards, and one must not expect them now to wish to take action to lower these. But the best foundation for securing them in the long run, is a bedrock of sound organisation, including the most effective possible use of staff resources. This is an aim which can, I hope, command the

support of all who wish to see the continuance of a strong place in the future for art and design within our further education system.
I thank the hon. Member once again for having raised this very important matter, and I assure him that it is one in which I take a personal interest.

Question put and agreed to.

Adjourned accordingly at half-past Four o'clock.